Data & Dimensions | Ep. 11 - GameStop's Journey from Retail to Rogue Trade and Back Again

View Full Transcript

I'm walking into a GameStop on U.S. Route 29 just north of Charlottesville, Virginia, about a 10-minute drive from the S&P Global office. It's right next to a grocery store. People are packing their cars, driving off slowly. It's a sunny day in May, so birds are chirping.

And the GameStop itself is surprisingly busy for a Monday afternoon. There are at least four people in here, and most of them have something in their hands. If you've been in a GameStop in the past half decade, you know what I'm looking at. Some video games, sure, but also a lot of T-shirts, Funko Pops, figurines, and trading card games like Pokémon and Magic: The Gathering.

It's a store built around some vague sense of the kind of things gamers would buy if they didn't need to buy video games anymore, or at least they didn't need to buy from a store. If instead, they could buy and download them online. But it wasn't always this way. GameStop used to be synonymous with buying games.

GameStop wasn't there in the beginning of gaming, really, but it was there when video games began to transition from a technological curiosity into a cultural touchstone. In some ways, GameStop is the story of the suburbs, of being an idle teenager, of sifting through the bargain bin, of late-night Call of Duty launch parties, of buying your first console and then selling it back a few years later. But it's also the story of the end of the shopping mall, the decline of physical media, and the shifting center of power in the $200 billion gaming industry.

And it's also the story of the rise of the retail investor, and maybe it's the story of the future of shopping altogether… although, maybe not.

Welcome to Data and Dimensions, a podcast at the intersection of entertainment, industry, and interactivity. I'm Neil Barbour, an analyst with S&P Global Market Intelligence Kagan. And today, it's just me.

I wanted to take a few minutes to talk about what's been going on with GameStop. For most of my career covering games, anyway, I didn't pay much attention to GameStop. I reasoned that it was a retail company, not a gaming company. Writing a lot about GameStop would be like covering Walmart or Target.

But that's not exactly true. Sure, GameStop is a retail outlet, but it was a retail outlet built around games, almost exclusively — a successful, growth-oriented business around that model. This week, instead of the typical interview format, I'm going to use this show to walk through the history of GameStop with data, reporting, and analysis from my colleagues at S&P Global Market Intelligence.

We have financial metrics for GameStop going back to 2000, when it recorded a $757 million year. And then it grew year over year at a double-digit rate all the way through 2008 to $8.8 billion in annual revenue. This covered the PlayStation 2 era, Grand Theft Auto III, the Xbox era, Halo, the Xbox 360 era, Call of Duty: Modern Warfare, the Wii era and Wii Sports, the Nintendo DS and Pokémon Diamond and Pearl, the PlayStation Portable era, and Monster Hunter.

These were the games and platforms that would define most of gaming for the next 20 years, and they were built around a strong distribution network of brick-and-mortar stores serving engaged gamers. GameStop would carry on with lighter growth for a few more years following 2008, but would log its first down year in 2012. This is the end of the Xbox 360 and PlayStation 3 console cycle.

In 2013, the PlayStation 4 and Xbox One consoles would ship with robust digital storefronts where users could pay for and download games without leaving the home. And GameStop has not been able to find a substantive growth story since. In 2025, it reported $3.63 billion in annual revenue, less than half its peak take.

This was also the rise of the smartphone as a gaming platform. My colleague, Perkin di Grazia, tapped into these changing trends in 2012 with a report from the LA Games Conference, "Growth in market an opportunity for game industry."

The increase in broadband speeds and the flood of tablets and smartphones hitting the market have presented the gaming industry with many new opportunities. Game companies now have an array of different possibilities for monetization and distribution. They also have access to an ever-growing market of multiple generations of gamers.

"The average overlap in music and entertainment taste between millennials and their parents is about 30% to 50%," said Joel Resnik, vice president of video games at Redbox Automated Retail LLC, speaking at the LA Games Conference in Los Angeles on April 24.

Game studios are now catering to multiple generations of gamers. They not only target kids, but also their parents, who may have grown up as gamers and kept on playing. The new generation of gamers does not stick to a single device or consider themselves PC gamers versus console gamers.

According to Resnik, "They just consider themselves gamers and will play on whatever device is available."

It is not uncommon for someone to have a PC, game console, portable gaming device, smartphone, and tablet. This deep penetration of connected devices in the gaming market has opened many new possibilities for monetization and engagement.

'"The key," according to Jon Estanislao, director of digital distribution at Activision Publishing, "will be getting the content to them on a consistent basis across all platforms so they can play what they want when they want."'

This is most widely seen with big game franchises. These titles are expanded across devices, including mobile applications like mini games or apps that enable players to chat with other players in-game on their PC or game console.

"It's important to find a way for customers to be able to interact and stay engaged with these titles when away from their consoles. It also opens up more opportunities for monetization," says Estanislao.

'"Gaming is starting to look like e-commerce," said Nanea Reeves, COO of gamer-focused video entertainment network Machinima. "It's all about the sales funnel."'

Many game companies rely on in-game purchases, which represent a big source of revenue, especially for free-to-play social and casual games.

In order to maximize revenue, Reeves thinks it's important for gaming companies to have a big data back-end and analyze everything players are doing in-game. "A major shift for us in the video game industry is to be more data-driven in how we make business decisions."

Reeves says it is surprising sometimes to see what users are actually doing, since in her experience they usually lie in focus groups.

Mobile gaming revenue has taken off. Kagan estimates that the industry's revenue increased by 93% between 2010 and 2011 to $1.53 billion from $793 million. Traditional game publishers are eager to claim a portion of that market. There has been heavy M&A in the mobile space, with companies like Zynga Inc. and Electronic Arts Inc. trying to build a dominant position by buying up successful small studios.

Aside from mobile, cloud gaming and electronic sell-through of games is on the rise. Platforms like EA's Origin and Valve's Steam offer a selection, convenience, and community that cannot be matched by brick-and-mortar outlets like GameStop and Best Buy.

Cloud gaming services like OnLive and Gaikai also aim to solve another pain point for some hardcore gamers. Hardware costs for newer, more graphic-intensive PC games can be a major barrier to entry for some. Gaming PCs can cost a small fortune if built with the best processors and graphics cards to receive the highest-quality playback. The same games on a cloud service can be played on a cheap netbook, tablets, and even some smart TVs.

Chris Donahue, director of global publisher/developer relations at OnLive, believes digital distribution will continue to grow and eventually overtake physical distribution. However, he thinks broadband infrastructure needs significant improvement, as download speeds are not fast enough across the nation for everyone to stop buying discs.

This is a major drawback to digital downloads and cloud gaming. In order to have high-quality playback, a player needs consistently fast download speeds. The same is true of game downloads, which can be very large. The much-anticipated game Max Payne 3 is a 35 GB install on a PC, which would take hours to download on a slow Internet connection.

Chris Petrovic, general manager at GameStop Digital Ventures, does not think digital distribution will be the end of physical media. He says that while along the coasts of the U.S. download speeds are fast, the heartland still relies on physical retailers like GameStop, Redbox, and Best Buy.

And Chris was right for a little while, anyway. But broadband got better. Broadband subscriptions went from 81 million in 2012 to 124 million in 2025. That's in the U.S., anyway, with lower-speed DSL accounting for only about 6% of those subscriptions as of 2025.

The next big article I found that touches on GameStop was from March 17, 2017, with a report from Anser Haider headlined, "Xbox's new Netflix-style subscription service could have unique advantage."

Microsoft's forthcoming subscription-based video game service for the Xbox One could threaten traditional video game retailers that have long relied on pre-owned and used game sales for revenue.

Set to launch that spring, Xbox Game Pass would cost $9.99 a month and would give subscribers unlimited access to a rotating library of more than 100 titles. Unlike Sony's PlayStation Now service that lets subscribers stream games to their devices, games offered via Game Pass could only be downloaded directly onto the subscribers' Xbox One console, allowing both online and offline play for as long as the subscription to the service stayed active.

Notably, video games giant Electronic Arts already offered a similar service on the Xbox One called EA Access, which lets subscribers play a selection of titles for $4.99 a month or $29.99 a year. Video game retail chain GameStop shares fell significantly after the EA service was unveiled in 2014 and again when Game Pass was announced in February. Investors seemed concerned that these services would negatively impact GameStop's lucrative used games business, which was already being encroached upon by the rapid growth in digital sales.

While EA's offering, which is now also available on PCs as Origin Access, did not prove as disruptive as investors initially feared, Game Pass might, as it was set to offer a wide range of titles from a variety of third-party publishers.

"Being from a major console manufacturer that can aggregate content from multiple publishers and market directly to their user base gives Xbox Game Pass a unique advantage over similar services," said Greg Potter, an analyst with S&P Global Market Intelligence.

The service represented a new way for both Microsoft and third-party publishers to squeeze money from older titles, Potter said, since they do not see additional profit from used game sales. Microsoft tried to restrict the used game sales market once before with a highly controversial system that prevented the usage of used games on Xbox One. That plan, however, was dropped after it sparked intense backlash.

The new Game Pass service would include a range of Xbox One and Xbox 360 games, including exclusives such as Halo 5: Guardians and third-party titles such as NBA 2K16 and Payday 2. Notably missing from the service, however, were games from some of the biggest publishers in the business, including Ubisoft, Square Enix, Activision Blizzard, and Electronic Arts. Microsoft declined to comment on whether titles from these companies would make their way to the service in the future.

"Whether that comes to pass will depend on take-up of the service and the actual revenue stream enjoyed by publishers and developers," said Dorian Bloch, an analyst at market research firm GfK. "It is also something of a tightrope when you consider that traditional stores provide the discoverability and the launch pad or event for major games and new hardware accessories. Microsoft may not wish to move too quickly or risk upsetting the current traditional retailer business model."

According to Bloch, the absence of major titles from some of these third-party publishers such as Call of Duty, Battlefield, and FIFA stood to impact the service's potential subscriber base considerably, since a large group of gamers play these annual franchises. Also, these games are usually played over a long period of time, meaning that a typical gamer may not view Game Pass as cost-effective simply because they do not have any spare time to play nonessential titles.

Xbox head Phil Spencer, meanwhile, envisioned a more ambitious future for Game Pass. In a recent Xbox podcast, Spencer said he would like to grow the service into a program for completely original games, much like how Netflix and Amazon offer original programming exclusives to their OTT services.

Francesco Radicati, a senior analyst at research firm Ovum, argued that from a publisher's point of view, the possibility of earning regular monthly revenue from subscribers rather than having it tied to their own launches could be an advantage for the service.

Potter, however, thought this initiative would work better for smaller studios and independent game makers looking to establish a new distribution platform for first-run titles.

"Like film and TV studios, control of the distribution of their content is key for game publishers, and seeding that content to a service like Game Pass would cede too much control and revenue to a competitor," Potter said. "If major publishers do come to the service, it could be similar to how HBO, Showtime, and other channels are sold on Amazon or Hulu as an additional add-on to the subscription."

By June 20, 2018, we were reporting on a potential sale of the company. From Fakhar Ali, "GameStop confirms discussions about potential deal."

Video game and electronics retailer GameStop on June 19 confirmed that it was holding talks with third parties about a potential deal. The statement was issued following a June 18 report by Reuters, which cited sources familiar with the matter who said GameStop was in discussions with private equity firms regarding a sale assisted by a financial adviser. One of the sources added that Sycamore Partners was among the parties interested in buying out the retailer. The private equity firm declined to comment to Reuters.

GameStop said in its statement that there were no assurances that the talks would result in an agreement and would not comment further on the situation unless and until it was appropriate to do so. The company had gone through multiple leadership changes since November 2017, when Executive Chairman Daniel DeMatteo stepped in as interim CEO and replaced J. Paul Raines.

That was followed in February by the appointment of Michael Mauler as CEO, but he resigned just three months later for what GameStop said were personal reasons. On May 31, the company named board member and former Microsoft executive Shane Kim to serve as interim CEO while a search for Mauler's replacement took place.

GameStop operates more than 7,200 brick-and-mortar stores in 14 countries in addition to several e-commerce sites, including ThinkGeek. It saw total global sales drop 5.5% to $1.93 billion in its fiscal first quarter ended May 1.

A deal did not materialize. And instead, the company agreed to divest Spring Mobile, an AT&T wireless retail business. As Isa Martinez reported on November 22, 2018, the company said it would continue the strategic and financial review after the sale.

"The transaction enables GameStop to enhance our performance with an increased focus on the video game industry and the rapidly growing collectibles space. These are areas where we have considerable experience and where we are well positioned to capitalize on our competitive position," said Dan DeMatteo, executive chairman of GameStop.

The company retired some debt, which reduced its operating costs, authorized a share buyback, and installed George Sherman as CEO in 2019.

But the increasingly digital-focused nature of the console business would further turn the screws, as Taimoor Tariq and Anser Haider reported earlier that year with "PlayStation 5 launch highlights accelerating shift to digital for video games."

Sony Corp.'s plan to launch a PlayStation 5 console without a disc drive highlights the growing digital focus of the video game industry, but analysts said physical sales of game discs are unlikely to disappear anytime soon.

In addition to the disc-less Digital Edition, the PS5 would also come in a standard version that includes an Ultra HD Blu-ray disc drive. The gameplay experience on both PS5 models would be identical, Sony said. The company did not disclose pricing details for the forthcoming consoles, which would hit retail outlets in time for the December holiday season.

Microsoft Corp., Sony's chief rival in the gaming space, already offered a digital-only version of its Xbox One console and was rumored to be working on a disc-less model for its new Xbox Series X, which was also set to launch later that year. Console makers Sony, Microsoft, and Nintendo Co. Ltd. had released multiple versions of their respective video game hardware before, but launching a new, next-generation model that does not support physical media was unprecedented.

Analysts said that hardware makers were adjusting their strategies to address consumers' growing preference for digital media. Digital sales made up a majority of console software revenue worldwide in 2019, at more than 60%, and that trend was expected to continue even for new consoles with disc drives, according to Kagan, a media research group within S&P Global Market Intelligence.

'"Console vendors make more money from digital purchases, because they don't have to share revenue with retailers," said Kagan analyst Neil Barbour. "Consumers willing to take the plunge into all digital get to save around $50 dollars on the hardware, while the platform holders get to mop up more of the software market."'

Video game software publishers also make more from selling their games to consumers digitally. The move toward digital benefited the bottom line of major game publishers over the previous few years, including Activision Blizzard Inc., Electronic Arts Inc., and Take-Two Interactive Software Inc. The coronavirus pandemic accelerated the shift to digital amid widespread stay-at-home orders, driving more growth in the gaming companies' most recent quarterly results.

As the pandemic continued to drive more people to stay at home, digital game downloads were expected to outpace physical sales. While the trend was driving revenue for game publishers, the shift was adding to the concerns of retailers such as GameStop Corp., which was already struggling before the pandemic forced mass store closures. GameStop's net sales declined 34% year over year to $1.02 billion in its fiscal first quarter ended May 2.

Michael Pachter, managing director of equity research at Wedbush Securities, said the decline in GameStop's sales was a clear indication that the pandemic accelerated the shift toward digital at the expense of physical media in the video game industry. However, he thought GameStop would probably recover if the company continued to make moves to right-size its business.

'"They're cutting stores, withdrawing from categories, paying down debt and reducing inventory," Pachter said. "I expect that they will generate positive free cash flow next year and the year after, and should be debt free in a few years."'

"There will always be some consumers who prefer physical discs over digital downloads," Pachter said. Many gamers resell their discs or share them with others after they are done playing them, and retailers like GameStop will continue to service those consumers.

While there may still be some demand for physical disc, improved margins were likely to continue to drive game publishers and console makers to incentivize digital downloads, according to Michael Goodman, director of digital media strategies at Strategy Analytics. However, there was also risk to pushing the transition too hard or too quickly.

Microsoft initially planned for its Xbox One console to be a digital-centric, internet-connected machine that prohibited the sale and purchase of used games, but a consumer backlash caused it to change course, Goodman noted. Even so, sales of the Xbox One suffered.

'"This was a painful lesson for Microsoft and a reminder for Sony that they should continue to support physical media on at least the main models of their consoles," he said.'

This is where we should start talking about GameStop as something other than a retailer. It's time to start talking about the short squeeze.

As Brian Scheid noted in a January 2021 report, "Most-shorted S&P 500 stock of 2020 surges, putting squeeze on short sellers."

GameStop Corp., the most shorted company on the S&P 500 in 2020, saw its stock more than double that week, leaving investors who previously bet on the video game retailer's demise scrambling to liquidate their short positions.

'"This is absolutely a short squeeze," said Michael Pachter, a U.S. video game, social media, digital media and electronics analyst with Wedbush Securities.'

In a short squeeze, a stock's rise prompts short sellers, who had bet on the stock to decline, to rush to cover their positions, putting more upward pressure on the stock. GameStop's stock price jumped from $17.69 per share at the close Jan. 8 to over $43 on Jan. 14. The stock settled at $39.92 on Jan. 14, up 27.1% on the day.

The shares fell back the next day, trading down 11% at midday ET on Jan. 15, though the $35.98 price was still more than double its Jan. 8 close. Short interest in GameStop in 2020 was based on the bet that the retailer would be unable to survive the coronavirus pandemic and the ongoing move to online retail. Short interest relative to shares outstanding climbed as high as 107.9% by mid-October, according to S&P Global Market Intelligence data. It was 97.7% at the end of December.

But many of those short sellers may have moved away from their positions after the company that week agreed to name Chewy Inc. co-founder Ryan Cohen and two of his colleagues to its board.

The short squeeze that likely followed was Cohen "flexing his muscle as a large shareholder and making moves to strengthen the board and help the company with an e-commerce strategy," Pachter said.

'"I think people are generally optimistic that he will succeed, but the move [Jan. 13 and 14] appears to have a lot of optimism built in," he added.'

Pachter said that GameStop had only 65 million shares, about 20 million of which were owned by management, insiders, and activists, leaving very little float.

Brian would pick up this thread later that month with "GameStop frenzy could 'forever change' shorting as traders disrupt risk calculus."

An ongoing retail trader revolution in equity markets, which blossomed from an epic short squeeze on institutional investors who bet heavily against beleaguered video game retailer GameStop Corp., may have upended Wall Street speculative strategies.

'"The GameStop phenomenon will forever change how we look at short selling," said Edward Moya, a senior market analyst at OANDA. "The Reddit-fueled frenzy on Wall Street is likely to lead to an increase in margin requirements from brokerages and will almost certainly lead to strict controls on future short selling," he added.'

Short selling, in which an investor borrows and sells shares with an intention of buying and returning them later at a lower price, became increasingly challenging during the pandemic as fiscal and monetary stimulus kept otherwise doomed companies alive, Moya said.

"The degree of difficulty was raised exponentially as an army of retail traders from Reddit, TikTok and other corners of the internet launched a frenzied market battle against hedge funds and other investors who had amassed large short positions against stocks teetering on the brink of ruin."

The battle had driven previously embattled stocks like GameStop and AMC Entertainment Holdings Inc. to dizzying new highs, caused major brokerages to restrict trading, and cost short sellers billions of dollars. GameStop stock was the most shorted of 2020, according to S&P Global Market Intelligence data, reaching a peak of 108% of shares outstanding in mid-October.

It began 2020 below $6 and was under $4 in mid-July as many of the video game retailer's brick-and-mortar stores closed and the company struggled to compete with its online competitors. The stock surged after being championed on online forums and was traded heavily by retail investors through Robinhood Markets Inc. and other commission-free brokerages. On Jan. 28, the stock hit $483 before closing at $193.60.

AMC's stock jumped from $5 on Jan. 26 to $20 on Jan. 27, with short interest at about 13.3% of shares outstanding.

'"Equity markets are supposed to be credible markets of value with some speculation," Andrew Brenner, head of international fixed income at National Alliance Securities, said in a Jan. 29 note. "This is out of control and will end badly for equity investing."'

The impacts on short selling were likely to be widespread, Moya said.

'"The future of short selling will need to respect the power of the retail trader and realize that having a strong fundamental argument against is not reason enough to short," he said. "Short sellers have thrived in the past in exposing fraud or identifying extremely unjustified valuations, but now they will need to clearly outline their thresholds on how much pain they can stomach if another GameStop-type incident occurs."'

Declan Harty reported in February 2021, "GameStop traders at a crossroads: 'To the moon' or 'along for the ride'"

Nate Ballarino is willing to ride his small stake in GameStop Corp. for however long it takes. A quiet member of Reddit's WallStreetBets thread, the 24-year-old RV salesman and part-time student at the University of Massachusetts Dartmouth waded into the GameStop frenzy at 9:46 a.m. ET on Jan. 25 when he bought 12 shares of the company at about $80 each.

Since then, Ballarino has expanded his position in the video game retailer to a little more than 43 shares that carried a market value of about $9,700 after a volatile day of trading Feb. 1. Even after the stock's sharp drop of about 50% the morning of Feb. 2, Ballarino was holding strong in believing the price would rebound later and could go on to reach four figures.

'"I'm holding, baby, holding all the way up," Ballarino said in an interview. "I'm just looking at my screen with a grin. This is like I'm watching a sports game or something."'

Meet the new day trader.

Emboldened by zero-commission trading, looser margin requirements, and technology that puts the stock market at their fingertips, an army of small investors that runs the gamut from college students and dentists to lawyers and nurses is piling into some of the hottest trades Wall Street has seen in years.

GameStop, a brick-and-mortar retailer that deals in used and new video games, has been at the center of it all. Once the most heavily shorted stock in the S&P 500, GameStop's 1,084.3% rise in 2021 has hammered hedge funds betting against the company, forced retail brokerages to limit some trades, and drawn the ire of Wall Street heavyweights who have called market manipulation on the retail investors believed to have helped spark the jump. The episode has caught attention in Washington, D.C., where lawmakers are gearing up for hearings and the U.S. Securities and Exchange Commission released a rare statement on the market volatility.

And in a twist WallStreetBets likely never intended, GameStop's meteoric rise has lined the pockets of big-time investors as well as the small-time traders like Ballarino.

For some Redditors invested in GameStop, the stock represented a classic value play, and they were not alone in their thinking. Ryan Cohen, the founder of Chewy Inc., took on an activist position in GameStop back in late 2020.

The company "needs to evolve into a technology company that delights gamers and delivers exceptional digital experiences — not remain a video game retailer that overprioritizes its brick-and-mortar footprint and stumbles around the online ecosystem," Cohen, a managing member of RC Ventures LLC, wrote to the GameStop board in November 2020.

But many Reddit users saw that moment as cathartic justice following years of frustration over the wealth the financial industry has enjoyed since the 2008 financial crisis. And for a few, it was simply a trade too good to miss out on.

Reddit traders bet that the hedge funds shorting the stock were overleveraged, and that the sheer power of a retail-led push would clear the way for a run-up in the stock, squeeze the shorts, and eventually force them to drive the price even higher when they buy back the shares to cash out their short positions.

Now everyone following the rise of GameStop's stock is asking: How does this all end?

'"The fervor that people were buying these stocks with, it was beyond this stock's 'going to the moon.' There was a real zeal to it," Interactive Brokers Group Inc. Chief Strategist Steve Sosnick said in an interview. "Bubbles and manias tend to run their course. This one is lurching toward an unpleasant ending."'

Kevin, who works in e-commerce in Connecticut and asked that his last name not be used because of potential implications to his job, began buying GameStop shares in late November on his Fidelity Investments brokerage account after following the chatter around GameStop on WallStreetBets for weeks. The 27-year-old amassed a position in GameStop of about 6,900 shares for a total $144,000 investment.

Then, on the morning of Feb. 1, he cashed out all but one of his shares, walking away with more than $1.8 million in the process, according to a screenshot of his brokerage account that he shared with S&P Global Market Intelligence.

'"The writing is on the wall," Kevin said in a Feb. 1 interview after the market closed and GameStop's shares had plunged more than 30%. "I think it's pretty much over."'

Kevin believed institutional investors, not retail investors like him, had been the driving force behind GameStop. So, when GameStop shares opened under pressure Feb. 1 after data was released that showed the short interest in the stock had plunged, Kevin took it as a sign of an impending crash.

'"WallStreetBets collectively is a drop in the bucket," he said. "Fundamentally, retail has no impact. All these other firms and institutions that are long on [GameStop] are the ones making money on it. These are all huge institutions that own millions upon millions of shares. They're the ones that are laughing. We're just along for the ride."'

GameStop's largest shareholders are Fidelity, Cohen, and BlackRock Inc., according to S&P Global Market Intelligence data. Cohen, who now sits on GameStop's board, owned 9 million shares of the stock as of Jan. 10, when shares were about $19 each. In the ensuing three-plus weeks, that position had grown by more than $800 million, or 472.3%.

Some data indicates that other institutional powers may have had a hand in buying up GameStop over the past few weeks too. Citadel Securities LLC, the Ken Griffin-controlled trading giant that executes retail orders on behalf of brokerages, received about 75 million sell orders in the stock from retail brokerages from Jan. 25 to Jan. 28. The brokers sent just under 74.5 million buy orders at the same time, complicating the narrative that retail traders were buying and holding en masse.

Citadel Securities is a separate entity from Griffin's hedge fund, Citadel Advisors LLC.

Citadel Advisors, along with its partners, recently injected about $2 billion into Melvin Capital Management LP after Melvin Capital suffered a 30% loss from a handful of short bets like GameStop that went wrong. The short squeeze in GameStop, along with other stocks, set the stage for Melvin Capital's holdings to plunge 53% in January, according to a recent report from The Wall Street Journal. Melvin Capital did not respond to requests for comment Feb. 2.

Melvin Capital has reportedly stopped shorting GameStop altogether, as have other funds that have wound down their shorts against the company, according to The Wall Street Journal. Data from S3 Partners provided to S&P Global Market Intelligence showed short interest in GameStop had dropped to about 53% of the stock's total float as of Feb. 1. The number of GameStop shares shorted over the past week had dropped 56%, S3 Partners Managing Director Ihor Dusaniwsky wrote in an email.

And yet, while GameStop's stock took a bruising to open the month of February as investors grappled with shorts covering their positions, Ballarino kept holding on to the 43 shares he held in a Robinhood Markets Inc. account.

Ballarino's thesis for the stock rising further was that there remained shorts who still needed to cover, which would eventually push the price higher as they bought back the shares they had originally loaned to short the stock.

'"They're desperate. They're panicking. And we see blood in the water," he said of the short sellers.'

Ballarino said he submitted three limit sell orders soon after the market's open Feb. 1 at a price he thought was high enough: $3,999.69.

The company was able to sell stock to raise capital and sharpen its operations, and it has returned to profitability. But, of course, it's a much smaller company. Remember, in the 2018 report, we said GameStop had more than 7,000 stores. Today, it has around 2,200.

It also has a staggering amount of cash and equivalents. And remember Ryan Cohen, the co-founder of Chewy, who made his way onto the GameStop board during the meme stock era, and he has big plans for the company, as Sarah Barry James reported earlier this month in "Analysts question funding, rationale in GameStop's $55.5B play for eBay."

Wall Street's reaction to GameStop Corp.'s unsolicited $125-per-share offer for eBay Inc. indicates interest in the deal mixed with a dose of skepticism.

On May 3, GameStop CEO Ryan Cohen sent a letter to eBay's board offering to acquire the online reseller in a cash-and-stock deal valued at around $55.5 billion. The video game retailer expects to fund the cash portion through its $9.4 billion in cash and liquid investments as of Jan. 31, 2026, and up to $20 billion in acquisition financing from TD Securities Inc.

Following news of the offer, shares in eBay jumped more than 8% in premarket trading before settling, closing on May 4 at $109.33, up from a $104.07 close on May 1. S&P Global Market Intelligence Kagan analyst Neil Barbour, who covers the gaming market, noted that while eBay's initial share price movement was significant, the stock remains below GameStop's offering price, indicating that investors are uncertain about the likely outcome of the offer.

GameStop's market capitalization as of May 4 was $10.69 billion. By comparison, eBay's market cap — even before GameStop's offer — was in the mid-$40 billion range.

'"The market wants to see that other $30 billion before it buys in," Barbour said, referring to the remaining funding that GameStop would need to close a $55.5 billion deal.'

eBay on May 4 confirmed its receipt of the offer, saying its board of directors would consult with financial and legal advisers to carefully review and consider the proposal. It advised eBay shareholders to take no action at that time. GameStop had accumulated a roughly 5% stake in eBay.

A week later, eBay rejected the offer, saying it was neither credible nor attractive.

So where does that leave us? There's still a GameStop next to a grocery store in suburban Virginia. There's probably one near you, too. And you can still walk there on a sunny day in May.

There are still kids and collectors with a little time to kill, and there are still glass doors and display racks and tiny plastic cases and all the physical props of a store that, for many of us, once felt like a part of growing up. But hovering over that ordinary little shop is this other thing: a company with billions in cash, a meme-stock backstory, and an aggressive CEO looking for the next step forward. Not exactly a game retailer, not exactly a holding company, not exactly an e-commerce platform.

The lights are on. And the doors are open.

Thanks for listening.