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  • Parv Jain

GameStop Falling Shares Reflect Battle With Increased Competition and Lower Spending

GameStop

GameStop, a store selling video games, saw its shares fall by over 14% on Wednesday. The company, located in Grapevine, Texas, made less money in the last part of the year because people are spending less and there are more online stores to buy from. GameStop also said they let go of some workers to save money, similar to what other companies like Sony and Electronic Arts are doing because the economy is uncertain and people are careful about how they spend their money. GameStop, known for its video game stores, is in trouble. If its share prices don't get better, the company could lose over $700 million in value. So far this year, GameStop's shares have dropped nearly 12%. It's a tough time for stores and online sellers, and GameStop is feeling the pressure. Even though it used to be a popular store in malls across America, it now has fewer stores than before, with 4,169 stores compared to 4,413 last year.


GameStop also became very famous on the internet in 2021. A lot of people buying shares through a website called Reddit made its stock price go up a lot, as much as 100 times. This made GameStop one of the first "meme stocks," which are stocks that get popular through social media.


Donald Trump's media company saw its shares jump more than 12% on Wednesday, surprising many as it follows the recent trend of meme stocks—stocks that get popular very fast on the internet. This comes right after the company had a great start on the Nasdaq stock market.


However, GameStop, which many consider the original meme stock, hasn't been doing well, according to Russ Mould, an investment expert. He finds it interesting that just as Trump's company is doing well, GameStop is facing difficulties.


Mould also mentioned that Trump's company didn't talk much about how it's doing or have a meeting after sharing how much money it made or lost, which usually companies do. He thinks this means the company's bosses are avoiding tough questions.


For the first time in a year, GameStop made some money. In the last part of the year, up to February 3, they earned 22 cents for every share, after not making any profit in the previous three months. But this news did not make the people who have invested in GameStop happy.


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