GameStop and the Game of Risk
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Stop, Game
I don’t know what to tell you. Maybe I’ll tell you three stories.
Here is a fundamental story. There’s a company called GameStop Corp. It sells video games at the mall. It has over 5,000 stores. For various reasons people do not buy a ton of video games at the mall these days. Two of those reasons are: People do not love going to the mall during a deadly pandemic, and people today increasingly buy video games by downloading them directly from online stores. Being a mall retailer of video games is not obviously a great business to be in, and this has been reflected in GameStop’s earnings and stock price. In 2011, GameStop reported net income of $408 million on revenue of $9.5 billion; in the last 12 months, it had a net loss of $275 million on revenue of $5.2 billion. GameStop’s stock traded as high as $62.11 per share in 2007; it got as low as $3.50 in March 2020. It closed at $18.84 on Dec. 31, 2020, for an equity market capitalization of about $1.3 billion.
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About this essay
Analysis of the GameStop trading phenomenon and its implications for market structure.
“GameStop and the Game of Risk” was written by Matt Levine. Read the original at bloomberg.com. Copywork shows the text so you can practice by retyping it word for word; all rights stay with the author.