GameStop Cashes In Its Meme Stock for $1.1 Billion
Internet memes are a funny old thing. At least, they are until they’re dead freakin’ serious, as legendarily troubled company GameStop has discovered this week.
Most of the time, they’re pretty innocuous and lighthearted in nature; consisting of little more than a picture of a cat, a scene from whatever 2000s animated movie people chose to remember that week, or some mug pulling a daft facial expression. Typically accompanied by something masquerading as a witty comment. Which I would, of course, know nothing about.
Sometimes, the denizens of the net take it upon themselves to use this methodology of viral interaction to propel something that ordinarily wouldn’t have gained much traction to roaring success. Such has been the case over the past few months with retail chain GameStop. Once the leading name in gaming merch, second-hand copies and miserable trade-in prices – the corporation has seen their stock slump dramatically in the era of digital marketplaces. Still, they just about chugged futilely along before 2020. Alas, it seemed COVID would pound the last nail into… erm, whatever the financial equivalent of a coffin is. A Juicero? Yeah, a Juicero. Good analogy. Google it, kids.
So yes, GameStop appeared to be heading for bankruptcy in late 2020, circling the drain like Mario and Luigi in the intro to the Super Mario Bros. Super Show. Several major players in the industry claimed it was nearing its end, relishing in the misery. But the internet was not about to let this particular Juicero be sealed shut anytime soon.
Partially as an attempt to spite shareholders who had banked on GameStop’s collapse (as part of a practice known as stock shorting) and partially just for the fun of it, Redditors and folks from elsewhere online banded together to initiate a trading frenzy over the firm’s stock.
Wall Street responded in kind – even to the point where their systems crashed for a while – and soon the two sides were locked in battle. GameStop higher-ups presumably sat on the sidelines with popcorn, watching the numbers tick higher and thanking their lucky stars. Hey, where the hell were you all when Blockbuster was going through this? Bunch of mercenaries.
And now, it seems the meme war betwixt the fat-cats and people who simply look at images of fat cats has borne fruit. As Kotaku reports, GameStop has cashed in its ‘meme stock’ to the tune of over 1 billion dollars. $1,100,000,000 to be precise. Good Lord, that’s a ton of zeroes.
In an SEC filing, representatives for the company had this to say: “GameStop has completed its previously announced ‘at-the-market’ equity offering program. The Company ultimately sold 5,000,000 shares of its common stock under the ATM Program and generated aggregate gross proceeds before commissions and offering expenses of approximately $1,126,000,000.”
That’s an awful lot of words to say “ta, lads.”
This isn’t the only unexpected windfall GameStop has enjoyed in 2021 as part of this fiasco. In April, they sold around 3.5 million shares initially to test the waters, netting them around $551 million. With a bit of rudimentary math, we can calculate that the big cheeses will now be lining their pockets with a total around the ballpark of $1.6 billion. Their plans for their new wads of dough? “GameStop will use net proceeds from the ATM Offering for general corporate purposes as well as for investing in growth initiatives and maintaining a strong balance sheet.”
Will all this be enough to save the time-honoured brand from total collapse? Only time will tell, but for now, it’s a testament to just how much the digital landscape has radically changed the way these sorts of fiscal negotiations go down.
If hordes of internet gamers rally behind a cause, there’s absolutely nothing to stop them, so all those folks hoping to cash in on failing businesses had better check their six from now on. As well as the front pages of Reddit and 4chan. Just in case.
Now then, guys – Disney Store’s Juicero next? Please?
What’s your opinion on this whole scenario? Did you take place in the GameStop meme war? Any other failing companies you’d like to see saved in this manner? Let us know below!