GAMESTOP TO THE TOP
February 9, 2021
For over a decade now, GameStop has been a subject of great criticism by the gaming community with its low trade in prices and becoming more and more inconvenient with digital copies of games becoming the norm.
For a while it seemed like GameStop was doomed to the same fate as Blockbuster, slowly fading out of popularity as a dying medium, with its ever declining customer base and the closing of 462 stores over 2020 with over 1,000 closures expected in the near future. Anyone who’s stepped into a GameStop could tell they were soon to be a relic of the past and so could the sharks on Wall Street.
The stock market is one that can be extremely lucrative if you play your cards right, but most of the time it is nothing more than glorified gambling for rich people. There’s little one can do to control the market and most investments are just a guessing game: invest when prices are low, and hope they go up. If they do, you win big. If they don’t, you are out a lot of money.
GameStop looked like easy prey as their stock (GME) was in decline for years, but as of mid-2020 was starting to pick up. What the short sellers on Wall Street didn’t expect, though, was that in this year someone on the Reddit forum r/WallStreetBets would notice and prompt other users to invest and skyrocket GME to over five times its previous high in December of 2007 from $62.30 to $325 on January 29th, 2021.
For some this looked like a win, and for others a loss as internet users celebrated across social media and those who were planning to short the stock rushed to save their wallets.
That wasn’t the end of it though as some, determined to stick it to the guys on Wall Street, held onto their stock and others sold it for a massive profit. The other side also had plans in mind as well.
Services like Robinhood and Acorns that many had used to buy the stocks were now limiting GME so that users could no-longer buy more, only sell, and the hedge funds and corporations affected began looking to the government to recoup their losses and stop this from happening again. Of course the government wasn’t very happy with the situation either and plans to have a Senate hearing soon on the situation.
Lastly, there’s GameStop itself to consider. The company for the past decade has been going downhill and the new interest is a breath of fresh air, but it won’t last long.
The stock price is already dropping drastically again as it has dropped from almost $140 to just under $60 in the past week. As several of the affected short sellers have stated, this isn’t truly going to support the company.
The only way for it to stay alive is if its fans go to the stores and buy more products — and no amount of buying stocks will keep it afloat for long. The thing they don’t realize, though, is that it was never about supporting GameStop; it was about making money and hurting rich investors.
Nobody has liked GameStop since the first time they tried to trade in over twenty games and got offered only a dollar. It’s been set to fail since the rise of Amazon and digital game copies overtook it, just like Netflix and Hulu did to Blockbuster.