GameStop – The Largest Video Game Retailer
Brief of GameStop as per Fortune.Com
Who would have thought that GameStop the mall mainstay of the 1980s, would be dominating news stories in 2021? However, the bizarre story of the video game salesman made headlines on Wall Street in January 2021 when a group of retail traders bid aggressively on the stock utilizing the Reddit thread r/WallStreetBets as a communication tool. Strong short-sellers including Steve Cohen, Dan Sondheim, and Gabe Plotkin of Melvin Capital were squeezed by the sky-high surge. GameStop is not a penny stock, though:
The company has been included on the Fortune 500 for 14 years, most recently ranking 464th in 2020. Undoubtedly, that represented a consistent decline from 2010, when it was placed at No. 255. In 2020, a company with its headquarters in Grapevine, Texas, reported $6.4 billion in revenues but a $470 million deficit. The business employed 30,000 people in 2020 and ran more than 5,500 outlets across 14 nations.
Due to the shift in sales of video games to internet shopping and GameStop’s futile attempts to penetrate the Smartphone retail market. The company’s performance deteriorated from the middle of 2010 to the end of the decade. Due to a short squeeze that members of the online forum r/wallstreetbets engineered in 2021, the company’s stock price soared. Because of the volatility of its stock price and the company’s short squeeze. The firm attracted a lot of media attention in January and February 2021. The company owns and publishes the video gaming magazine Game Informer. in addition to its retail stores, which are now rated 521st on the Fortune 500.
Biodata of GameStop
The world’s largest retailer of video games is the company GameStop Corporation located in the United States of America, it maintains its Head office in Galveston, Texas. The current CEO of the company is Matthew Furlong. The ticker of the company on the internet and other communication sources is GME.
Key Financials (Last Fiscal Year) of GameStop
During the last fiscal year, the company’s revenue was $6,466 million and faced a loss of $-470.9 Million. Overall Assets of the company and Total shareholder equity is $2,819.7 million and $611.5 million respectively.
GameStop – NRF (National Retail Federation)
Yearly retail sales are applied to rank the top 100 retailers. Keeping in view the sales of GameStop in the Financial year 2019 (worldwide equal to $5.95 billion). National Retail Federation ranked GameStop 97th in the Top 100 Retailers 2020 List. In the Top 100 Retailers, 2021 List company moved up to 93rd Number.
These crowd-sourced events are now even more likely to continue happening in the future because of the influence of the GameStop trading event on the market and in the media. Future-ready tech leaders will be better able to reduce the danger these events bring to their businesses if they embed adaptive and resilient capabilities into their businesses.
The algorithm, Artificial Intelligence and GameStop
Computers employ algorithms, which are collections of rules, to recognize, classify, and sort data as well as to solve problems. Every social media network uses them to respond to inquiries and choose the information — such as posts, videos, and photographs — that would best serve its users. Algorithms boost audience engagement by being effective and allowing for content personalization, giving the IT companies that created them a competitive advantage.
The algorithm of each social media network is uniquely crafted to meet its unique requirements. Each one aims to raise and keep audience involvement. When anything gains traction on social networks, it truly gains traction. Any trend that takes off, whether it be a meme, song, or video clip, will appear out of nowhere. The algorithms take note of the higher level of involvement and reward it by giving it higher ranks and more attention.
The WallStreetBets investors who supported GameStop’s shares were quite active, which resulted in widespread attention and consequently, the investment required swaying the market.
Due to its prominence, Reddit’s algorithm may have expedited the GameStop phenomenon. But a lot of individuals helped with the initial push. The life the GameStop story would take on and the extensive media coverage could scarcely have been predicted by an algorithm.
Recently, GameStop’s stock price increased once more. This time, a leadership transition and revamped company model combining digital sales and new technology served as the explanation instead of a Reddit mob.
Conclusion
The technology-driven world’s future should be bright, full of automated conveniences and more freedom. This includes the future of artificial intelligence, social media, and money. But for this to happen, people must come first in our technological future. Real humans also don’t neatly fit into an algorithm’s boxes.
Everything starts with a voice. As GameStop proved, change can happen when a voice is heard and amplified by two of the most potent technologies the world has ever known: artificial intelligence (AI) and social media.
