Attention is back on video game retailer GameStop as it prepares to release its first earnings report since its stock soared in value in January this year. With plenty of discussion over whether the ailing retailer can live up to its lofty $200 share price, a former exec has spoken to the Wall Street Journal about internal turmoil within the company about its direction and competition.
Chris Petrovic joined GameStop in 2009 to spearhead its digital ventures, but says that the products that were picked up by the company in this space, such as digital game downloads and game streaming, were quickly abandoned. Petrovic resigned from GameStop in 2013.
“A lot of the initiatives that we had brought to the table and invested in just died on the vine,” Petrovic said of his time with the company. He also spoke of an internal division between those who considered the rise of digital downloads and cloud gaming as threats, and those who were unconcerned.
These strategic missteps led to the company becoming one of the most shorted on the market, as seasoned investors bet against the company. This is one of the factors that then led to retail investors buying GameStop shares in bulk, trying to force short sellers to give up their bets at a loss.
Though not retaining the heights it reached in January, GameStop’s share price is still much higher than most analysts believe the company’s value to be, currently sitting at around $200 per share. Investors say they have confidence in new board member and major investor Ryan Cohen to turn the company around.