GameStop’s No Good Very Bad Week

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Photo by Alexey Savchenko on Unsplash

Monday, March 16th

On Monday, GameStop’s stock finished the day at $4.39 a share. Their stock price had largely stayed flat during the historic selloff. People working from home and being laid off could help to improve the sale of games and gaming devices if people were forced to entertain themselves indoors for weeks or months to come. There were rumblings about businesses closing, but so far, the malls were still open, and GameStop was plowing ahead as well as they could.

Tuesday, March 17th

As Tuesday morning dawned, the story first reported by Kotaku on Monday night gets picked up by more outlets, including Polygon, bringing attention to GameStop’s response to the coronavirus. Employees begin speaking out in larger numbers about GameStop’s upper management’s blase attitude towards the disease and their employees’ safety. As these stories are gaining steam the morning of March 17th, GameStop had not canceled any of their regularly scheduled events, which included two midnight game launches that were scheduled to happen later that week.

Wednesday, March 18th

As these stories begin circulating through the gaming community and beyond, GameStop sees its stock price drop by almost a dollar. Wednesday sees their stock open immediately lower and continue to fall throughout the day. Tuesday’s stock closed at $4.23 a share, and Wednesday saw a low of $3.56 a share.

Thursday, March 19th

Thursday sees a confluence of forces converge on GameStop all at once. First, California Governor Gavin Newsom orders a halt to all non-essential activities and orders Californians to stay home indefinitely. This order essentially forces the closure of all businesses deemed non-essential to shutter until ordered otherwise. Businesses considered essential are grocery stores, pharmacies, and ancillary businesses that keep the supply chains moving. That would include auto repair, gas, and some hotels. Truck drivers need to stay on the road, vehicles need to keep moving, and the grocery stores need to continue to feed the people as they hunker down.

Friday, March 20th

By Friday morning, it becomes clear that GameStop has lost the room. The stories about their claims that they are an essential business, the leaked conference call, and the general backlash are circulating in full force. The negative press is growing so bad that their stock was downgraded to a neutral stock, and their target price was slashed almost in half from $8 to $4.25.

Looking Forward

At the time of writing, this GameStop’s stock is still below $4/share, and they were already closing hundreds of stores towards the end of 2019. It is hard to blame companies for trying to keep their revenue afloat during this trying time, but doing so at the expense of the safety of your employees, your customers, and your reputation seems exceedingly foolish. GameStop was already a company pegged for a potential looming bankruptcy or general folding by many analysts, and making questionable decisions during a time of crisis is not going to help their outlook going forward.

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Hobbyist historian | Political scientist | Story teller | Lover of animals | Freelancer | Always open for work ->

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