- June 17, 2021
- Posted by: Stratford Team
- Category: Business
Were traders on the WallStreetBets subreddit right about GameStop (NYSE:GME) after all?
It is only because of their willingness to rally around the video game retailer against hedge funds heavily shorting the stock that caused its shares to soar. The stock’s elevated price allowed GameStop to raise hundreds of millions of dollars, albeit by diluting shareholders, but that let it vastly improve its financial position.
GameStop paid off all its long-term debt, reduced even its short-term debt to a relatively negligible amount — just $48 million, which is the result of a low-interest loan from the French government similar to the CARES Act in the U.S. — and ended the first quarter with over $707 million in cash and restricted cash in the bank.
It now has the financial wherewithal to achieve the dramatic business model transformation needed to meet the challenges of a rapidly changing video game market, again…
