It’s no secret that video game retailer GameStop has struggled in recent years, especially as video game sales have become increasingly digital. Due to GameStop’s dire financial straits, the company’s stock price has dwindled, with many predicting that the company’s closure is just a matter of time. Considering this, some may be surprised to see GameStop’s stock price sky rocket recently, with the company enjoying yet another spike.
GameStop’s stock price has jumped up yet again, with trading having temporarily halted. GameStop’s stock price is $96.93 at the time of this writing, though it was around $150 earlier today. Like the most recent incident, GameStop’s stock price jump is primarily due to Reddit day traders who are essentially trolling the stock market. It remains to be seen how long this will continue, but it seems more people are jumping on the bandwagon.
GameStop’s stock price received a legitimate bump earlier this month when pet food billionaire Ryan Cohen joined the company’s board of directors. Even so, many analysts still predicted that GameStop’s days were numbered, and those doom and gloom reports are partially what inspired people to rally and inflate GameStop’s stock price.
Despite an increasingly-digital marketplace, GameStop has been able to hang on for a variety of reasons. Previously, GameStop was going to reinvent its stores to be more of an “experience” than a cut and dry shopping destination. The COVID-19 pandemic threw a wrench in those plans, with GameStop eventually having to place restrictions on its stores.
Later on, GameStop announced a new partnership with Microsoft. Through this multi-year deal, GameStop stores were upgraded to feature Microsoft hardware, with the stores now offering customers things like Xbox All Access. Furthermore, the deal allows GameStop to get a share of digital game sales from consoles sold at the store. Similarly to when Cohen joined GameStop’s board of directors, the Microsoft deal announcement gave the company’s stock price a small bump, though it was a far cry from what it is currently experiencing.
While GameStop’s big stock price jump is not necessarily indicative of a genuine comeback for the once-dominant video game retailer, it could very well help to extend its life similarly to the Microsoft deal and the likely sales bump it enjoyed from the launch of the PlayStation 5 and Xbox Series X next-generation consoles. And once next-gen console production is able to produce enough supply to meet demand, it’s likely that GameStop’s hardware sales will improve even further.
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