Why GameStop Couldn’t Take This Golden Opportunity to Save Itself

1 min read

The story of GameStop (NYSE: GME) and its epic short squeeze has captured the attention of people all over the world. What seemed to be a failing video game retailer suddenly was on top of the world, with a soaring stock price that seemed to signal better times ahead.

Unfortunately, after going from $17 to $483 per share in the span of a few weeks during 2021, the stock subsequently fell back to earth. It lost between 85% and 90% of its value and is seemingly destined to sustain a downward trajectory.

Looking back on what happened with GameStop, the obvious question many people have is why the company didn’t take advantage of its good fortune to bolster the chances of surviving its tough times. Specifically, when investors were willing to pay such high prices to obtain shares of GameStop stock, why didn’t GameStop itself accommodate them by offering its own stock and raising a ton of cash in the process?

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