GameStop Buy Up May Avoid Bankruptcy

: Chris Lee Law Firm

  Filed under: News

This week a struggling video game retailer, GameStop, has rewritten its story in the news media. It wasn’t but six month ago that news stories surrounding GameStop focused on their closing of some 800 nationwide stores amid the pandemic challenges; and possible upcoming Chapter 11 bankruptcy.  After a rollercoaster of a week in Wallstreet, the financial outlook for GameStock has flipped on its head entirely overnight.

Financial Flip

The price of GameStop stock has declined from $45 a share, to $4.45 a share in the last five years. As retail malls and centers become relics, the brick and mortar store has not kept up with technological advances in its operation and sales. That is, until earlier this year when market moguls began to notice a growing opportunity to buy up sinking stocks.  A silent group of consumers noticed the attention the stock was getting, and organized a massive stock purchase of GameStop shares by average consumers. These purchases resulted in GameStop stock shares soaring by triple digits in under a day.

This recent boom of trading GameStop stock has many speculating about its fate as the next Fortune 500 company. However, the more likely scenario of this unprecedented, consumer-driven event may have now positioned GameStop to resolve its debts directly without the need for debt restructuring in bankruptcy. However, financial experts are concerned about this market madness and the ultimate outcomes. Many point to the inevitability the stock will, once again, decline to its more appropriately valued position. If this happens, there wills an unpredictable bottom, leaving the fate of GameStop is still to be determined.

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