GameStop and AMC shares are on the run, but their companies are not

To keep its business, Grapevine, GameStop, based in Texas, has been working to pay off debt and pledging to accelerate its e-commerce business. Over the past holiday season, the company’s ecommerce sales are up more than 300% from the same period a year earlier, aided by the release of new video game consoles from Microsoft Corp.

and Sony Corp.

One of GameStop’s newest board members, Chewy Inc. co-founder Ryan Cohen, last year urged the company to exit underperforming stores in the U.S. He also called for the company to close non-essential operations in Europe and Australia and use the proceeds to make technical improvements such as refreshing the GameStop online store.

Analysts expect GameStop to show its fourth consecutive annual revenue decline in its last fiscal year amid declines in its core businesses and efforts to streamline its operations.

—Sarah E. Needleman

AMC AMC 53.65%

Entertainment Holdings

AMC, the world’s largest movie theater chain with nearly 1,000 locations, became the retailer’s newest darling after signing a series of financing deals that are expected to help avoid bankruptcy.

Since the start of the coronavirus pandemic forced AMC to temporarily close most of its theaters, it has been operating in Leawood, Kan. established company faced the real possibility of running out of money, and warned investors in October that it might have to file for Chapter 11 if it doesn’t raise enough money from investors willing to bet on the recovery.

AMC’s fortunes began to turn with the introduction of coronavirus vaccines late last year, sparking hope among investors that it won’t be long before people return to the movies.

The company has raised about $ 1.3 billion in debt and equity funding since December and sold its latest shelf offering on January 27, right after users on Reddit’s WallStreetBets forum drew their attention to it as the next stock to back. .

However, AMC is not quite out of the woods yet, and Chief Executive Adam Aron warned on Jan. 25 that while “any discussion of impending bankruptcy is completely off the table,” investors in AMC are nevertheless advised to exercise caution as the company are uncertain in the face of the ongoing pandemic and new forms of the coronavirus.

—Alexander Gladstone

Bed Bath & Beyond Inc.

BBBY 5.02%

After an activist investor dismissed his previous management in 2019, the household goods retailer is trying to turn a corner under new CEO Mark Tritton, a former Target. Corp.

executive. Mr. Tritton has hired a new leadership team to clean up stores, simplify pricing and streamline goods. “The wider the range, the more confused the customer is,” said Mr Tritton in November.

The company is closing approximately 200 of its more than 970 Bed Bath & Beyond stores and has sold assets considered non-core such as Christmas Tree Shops. It has also launched a share buyback program totaling a whopping $ 825 million over three years.

The company, which also owns BuyBuy Baby, is benefiting from a shift from pandemic spending to items for the home. But some analysts worry that once life gets normal, it will give up some profit as shoppers spend more on travel and dining out. The retailer also faces tough competition from mass market chains such as Target and online rivals such as Amazon. On January 26, before the stock gave up some of its recent gains, UBS lowered it to “sell” over concerns that the turnaround would be in fits and starts and other troubles.

—Suzanne Kapner

Nokia Corp.

ENOUGH -2.77%

Nokia in its heyday dominated the market for rugged phones that were built for calling and not much else. Then the smartphone revolution robbed the Finnish company of the market share it once had, forcing the company to abandon mobile phones and focus on the building blocks of the mobile economy: network equipment that connects mobile devices to the rest of the internet.

Nokia’s profitability has suffered since the 2016 purchase of Alcatel-Lucent, another maker of network electronics. The merger made the new company more complex and forced expensive upgrades for customers looking for standardized mobile devices. Competitors Ericsson AB and Huawei Technologies Co. have taken the opportunity to gain market share in key countries.

The company continues to supply much of the world’s networking equipment, a market poised to grow this year as carriers install new technology to support faster 5G wireless service. The company shook up its management team last year by appointing a new CEO and Chief Financial Officer.

Nokia is preparing to sell more machines to replace cell tower equipment from China-based Huawei, which the US and many associated countries have effectively banned over national security concerns. But geopolitics cuts both ways, and growing tensions with the West could hurt Nokia’s own sales in China.

—Drew FitzGerald

BlackBerry Ltd.

BB -3.75%

BlackBerry CEO John Chen successfully saved the Canadian company from near-collapse after being hired in 2013 to reinvent a smartphone maker that had relinquished its dominance in the global marketplace to more nimble competitors like Apple Inc.

and Samsung Electronics Co.

He downsized the company’s workforce and global operations and authorized other manufacturers to make BlackBerry phones.

Mr. Chen, a software veteran, tried to reinvent BlackBerry by selling software and services designed to protect corporate and government communications systems and mobile devices from viruses and other online threats.

He sought to expand this business in 2018 with a $ 1.4 billion purchase from Cylance Inc., a maker of antivirus software. The takeover did not deliver the promised turnaround. Cylance’s co-founder Stuart McClure left in 2019 and BlackBerry’s revenues continue to shrink. The company has reported net losses for the past seven quarters.

Another setback is the uneven demand for cars during the Covid-19 pandemic. BlackBerry sells security products to car manufacturers to protect computer and communication systems in cars against cyber threats.

—Jacquie McNish