GameStop has been on a rocky road these last few years. The company has been closing hundreds of stores in a bid to stave off bankruptcy. The retailer has had no luck trying to turn things around in other ways either. A ring of controversy hangs around the gaming company as they try to rebound thanks to the increased interest in gaming this year. That interest wasn’t a big help early in 2020 though, when the company tried to flout local anti-COVID restrictions and self-classified as an essential business in some areas. The store also forced in-person ordering of next-gen consoles, leading to some shoppers having to deal with crashing order systems and possible COVID-19 infection for a console, just ridiculous.
All things considered, no one could have predicted what would happen in the last month. GameStop was at the center of a global storm of financial market turmoil and controversy. The short version goes like this: the company had its stock “shorted” and way too much stock ended up being shorted. Shorting is when an investor essentially bets against a security, hoping for the price to fall.
GameStop stock prices did not fall, not at all. Before the brokers halted trading, putting a sudden stop to the meteoric rise in prices, things were going crazy. The stock soared to a high near $500 per share. Currently, the share price has settled at around $50 a share. This was all driven by a flurry of individual traders flooding the market with activity for GameStop, AMC and other small-fry companies. These stocks were all shorted to some degree, and the hope was that they would see a massive rise in stock price. So far, it seems like only GME has had a chance to shoot up in price, thanks to the massively shorted stock.
The controversy prompted a hilariously pointless Congressional hearing in the US, as well as some movie deals, yes really.
Now though, it’s getting worse. After the bumpy road of the last month concerning stock prices, things are looking grim. And for one reason or another, the current GameStop CFO has announced he’s headed for the door. Jim Bell, Executive Vice President and Chief Financial Officer, will be leaving the post on March 26.
If GameStop fails to find a replacement, Diana Jajeh, who is currently Senior Vice President and Chief Accounting Officer will take the post. They will serve as interim CFO until a permanent position is filled by the company.