A little over one year after GameStop’s stock price skyrocketed thanks to the enthusiasm of Reddit-organized day traders, the company’s stock is once again surging thanks to a frenzy of wild financial moves.
Its stock is currently trading at $170.66 per share. That’s slightly down from a recent peak of $189.59 on March 28th, but much higher than its low of $78.11 value from March 14th.
For comparison, GameStop’s peak stock price was $325 per share in January 2020, when news of the stock’s performance went mainstream.
Is the stock price shooting up because of the company’s performance? In short: no. GameStop has still posted losses for the last few quarters, and last year’s stock enthusiasm mostly served to give key executives some healthy golden parachutes.
There are two key factors driving the current stock purchases. As Kotaku notes, GameStop board chairman purchased over 100,000 shares of the company’s stock last week for roughly $10 million. The purchase made ripples in the online trading community, signaling positivity in the company’s value.
Then this week GameStop announced an upcoming stock split (the first in 15 years) that would increase the number of purchasable shares from 300 million to 1 billion. Getting in before the split means that stockholders stand to see significant gains, because even though each share will be worth “less,” they will have an equivalent number of shares as they currently hold, while new stock purchasers will need to spend more money to access that quantity of shares.
Again, this all comes without any major operational changes to GameStop’s business model. There’s a cryptocurrency-based NFT market on the way, but it’s unclear if anything GameStop offers could rival the dominance of other NFT trading platforms.
(Depending on who you ask, the NFT fad might be about fade out, but any good horror movie fan knows the serial killer is liable to come back from the dead).
It remains unnerving to watch what used to be a major component of the video game distribution industry maintain its prominence strictly through weird stock market tricks. Former Nintendo of America president Reggie Fils-Aime expressed similar frustrations after he departed GameStop’s board last year.