GameStop has been in the news a lot recently for reasons only tangentially related to games. Most recently though, it’s because it released its first earnings report since the stock fiasco in January.
News of GameStop‘s stock prices dominated news headlines earlier this year. Day traders on Reddit’s r/wallstreetbets subreddit worked together to begin buying and holding GameStock stock en masse. This caused GameStop’s stock to skyrocket over 200% in value. They did this in order to mess with some large firms that were short selling the stock; so they could make money, while the established traders lost big time.
Due to US regulations though, GameStop wasn’t able to cash in on this massive windfall on its stock prices. It would have been illegal for it to sell its own stocks without notifying investors first. Its fourth-quarter results were a little below analysts expectations; only making $2.1 billion as opposed to the predicted $2.2 billion, and sales dropped for the ninth quarter in a row.
As part of the report GameStop announced Jenna Owens, the former director of distribution and fulfillment at Amazon, as its new Corporate Operating Officer after the old one stepped down. Normally a company will hold a Q&A session with investors on their earnings calls, but GameStop declined to do so this time. Investors did not take the call well, and their stock price dropped 10% afterwards.
It’s not too surprising that GameStop isn’t doing well, despite its recent rise in stock prices. With the rise of digital storefronts, analysts have been predicting for years now that GameStop will go out of business. Sales for physical games have been dropping, even as gaming reaches a wider audience than ever. GameStop’s response, dedicating more shelf space to merchandise sales, has only helped to drive customers away. Having to shut down most of its stores last year due to the coronavirus pandemic certainly didn’t help.
On the other hand, many people are sad to see GameStop struggle like this. Many gamers have fond memories of GameStop; of buying games, of midnight launch parties, and of going to events to pick up a new rare Pokemon. GameStop provided a sense of community and belonging to a lot of gamers. It provided a place to see what was going on in the larger gaming world, to get used games cheaply, and to connect with other gamers in a time before the internet. People are worried that those times may finally be coming to an end.
Source: Investors.com
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