At this point, the GameStop short squeeze has solidified its place in history as one of the stock market’s most legendary events. By popular request, we’ve decided to share GameStop’s origin story (actually, it’s more of an entertaining recap of the company’s early history). Tighten that diamond-handed iron grip you have on your balls of steel, and let’s get into it (also, read ‘til the end for a huge plot twist)...
It’s 1982 in the great state of Texas. Two friends (and ex-business-school-classmates) get together and decide to open a chain of retail stores that sell software and games. They name it Babbage’s after the famous English Mathematician, Charles Babbage (known in the math world as the “father of computers”).
After a decade, the company is successful. Babbage’s teams up with another creatively-named retailer, “Software Etc” to create “NeoStar Retail Group”. NeoStar operates hundreds of locations around the United States. Then, disaster hits. By 1999, competition from big discount stores proves to be too much. The retail group declares bankruptcy.
Enter Leonard Riggio. In a shrewd business move, he buys the bankrupt company for a measly $59 mil. Some retail stores are re-purposed and rebranded to “GameStop”, and Riggio rolls out 30 locations in strip malls across Texas. He grows the brand. Then, he sells it. And who buys it? Take a guess…
Your guess is wrong—the right answer is Barnes & Noble. In 2002, after acquiring another large video game reseller, the GameStop brand is spun off as its own company. It IPOs (with B&N still owning a majority stake). But a couple years later, Barnes & Noble puts its paper hands on display and dumps all of its shares, making GameStop an independent publicly traded company.
And after 17 years, here we are today: with GameStop’s share price at $189.25 (side note: If you’re on the right side of history, you still own some GME). Thanks for reading.
**To keep reading, check out these resources: this article, and this wiki page.
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