GameStop (NYSE: GME) lost 90% of its market value over the past three years as mall traffic dried up and digital downloads torpedoed sales of physical games -- which led to fewer trade-ins and sales of preowned games.
The bears claimed that GameStop was the "next Blockbuster," and its ongoing declines supported that thesis. Its revenue fell 13% last quarter (its fourth straight quarter of declining sales), its comps tumbled 10%, and its net income plunged 63%.
GameStop expects its comps to decline 5%-10% for the full year, while analysts expect its earnings to drop 45%. Those declines scared away most of the bulls, but one major investor -- Scion Asset Management's Michael Burry -- is betting big on its recovery.