GameStop Corp. GME

The business

GameStop sells video games, consoles and collectibles out of 2,206 stores, about 1,600 in the US with the rest in Australia and France. The part that matters is the glass case at the front. Collectibles, meaning collectible cards and the grading and authentication service around them, reached $348.9M in the April quarter, 41.8% of sales, growing 65%, and is now the largest of the three categories for the first time. Hardware fell to 39.9% of sales and software to 18.3%.

The stores flipped from liability to asset in one annual report. The prior 10-K promised to close "a significant number" more; the next called the domestic footprint "a core component of our logistics infrastructure strategy." Same estate, repurposed as physical intake for card grading. The grading partner is Collectors Holdings, parent of PSA, whose chief executive Nat Turner sits on GameStop's board and holds up to 10% of PSA. Commercial terms have never been disclosed.