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GameStop: Tracing the video game retailer from IPO to meme stock rise

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Yahoo Finance's Jared Blikre looks back at the origin of game retailers, movie stocks, and now meme stocks.

Video Transcript


BRIAN SOZZI: GameStop shares are below $100 and down 75% over the past year but this bearishness on the video game retailer was definitely not in play around this time last year during that meme stock mania. Yahoo Finance's Jared Blikre joins us to recap GameStop's rise and fall before the unwitting banner of the meme stock movement and where it is one year later, Jared?

JARED BLIKRE: Well, I don't know about the fall part, it's still up what, something like a few hundred percent? But let's go to our then and now production here. This is something we're doing on a monthly basis and kind of comparing two different time periods. We've done now versus the 1930s and the 1920s and now we're going to do GameStop and meme stocks versus one year ago.

So we're talking about GameStop obviously. This is a video game retailer that traces its roots back to Babbage's and that's a Texas-based software retailer that opened its doors in 1984. Now in 1999 Babbage's launched its GameStop brand along with gamestop.com, allowing customers to buy video games online.

Later in 1999 and 2000, Babbage's and video game retailer Funco, not to be confused with Funko, were bought by Barnes and Noble who officially renamed Funco to GameStop Inc. Now, GameStop went public in 2002 with an IPO of $18 per share as you can see there and in 2004 became an independent company when Barnes and Noble sold 59% of its stake in the company to its stakeholders. Remember, Barnes and Noble everybody? I do.

The year set off a period of success for the company as GameStop would acquire, it would acquire EB Games in 2005. Full disclosure, I worked for a predecessor of EB Games called Electronic Boutique way back in 1994, that's how old I am, and also they would acquire Rhino Video Games in 2007.

GameStop also spawned movie retailer MovieStop in 2004 and at its height before the meme-- meme craze excuse me, GameStop was trading just shy of $64 per share and that was at its 2007 peak. So let's take a look at this chart now. And this is AMC, can you believe that? We got the wrong stock there. Anyway, if we got a stock-- if we got a chart of GameStop I would really appreciate it because back in 2019 GameStop said it was closing 180 to 200 underperforming stores over the next two years.

A year after the announcement, four GameStop board members, they stepped down. GameStop would eventually rally 14,000% from the pandemic low of $3 and change, all the way up to $483. Since the meme stock frenzy a year ago, things have cooled down for GameStop but the stock is still well above pre-2021 numbers, trading at about $92 as you can see on your screen, guys.

JULIE HYMAN: I love the lessons of GameStop, right? One of those big lessons being like it's really hard to time the market. Because if you got in early enough, you're still up when it comes to GameStop but if you got it in when everybody else was getting in, it's a lot harder to have been up in that period of time. That AMC-- let's consider that AMC chart a tease shall we, Jared? Because I'm curious then and now how some of those other meme stocks have done?

JARED BLIKRE: Well, I'm glad you asked, Julie. We can take a look at the YFi Interactive now. I have our meme stock heat map up and it's looking pretty red today, not a lot of green. And in fact, if we take a year-to-date look, it's going to get even redder. We can see AMC here, that's down almost 50%. GameStop, not seeing that right here but GameStop down as well. There we go, it's down 37% right next door to it.

And then over the last year, let's take a look at that as well. We see some winners, some losers. Look, AMC is up 65%. Meanwhile, GameStop is down 50% but it is about timing, Julie. And I think one of the lessons of the rise of the retail trader from last year is they had it really good going in and then things kind of turned around and that teaches you some hard lessons. And it's never easy, trading is never easy. If there's anything I could bring to the forefront in this discussion than that. But if you stick with it for a while and you HODL, sometimes you got to HODL the right stocks, it can work out for you.

I am not a passive investor myself, always been an active trader. I love trying to time the market but it can get frustrating and we are in a completely, completely different market environment than we were a year ago. So as a trader, you just have to learn about different market environments and adjust accordingly.

BRIAN SOZZI: Well, one thing I was reminded of the past year is you are the man, Jared Blikre. We're very lucky to have you.

JARED BLIKRE: I appreciate that.

BRIAN SOZZI: Good stuff indeed. We'll check back with you soon.