By Mackenzie Tatananni
Once-mighty meme stock GameStop is in an uncertain place, as shares trade sharply below the heights they reached in 2021. Enthusiasm has worn out, and yet the stock ambles along.
For a while, GameStop was seen as the poster child of an internet-era craze where stocks gain viral popularity in online communities, leading to violent price swings that are disconnected from a company's fundamentals.
A short squeeze at the start of 2021 made GameStop one of the earliest examples of a genuine meme stock. Retail investors congregated on social media and piled into the stock to drive the price through the roof. Frenzied trading sparked by investor Keith Gill, better known "Roaring Kitty," pushed the stock to its record closing high of $86.88 in Jan. 2021.
Nearly five years later, GameStop has failed to return to those levels. Shares were 6.3% lower at $21.62 on Wednesday following the release of fiscal third-quarter earnings. Its 52-week range shows the price has trended from $19.93 to $35.81, with GameStop currently trading near the low end.
Shares have lost 31% this year alone. The benchmark S&P 500, by comparison, has gained 16%. It's no stretch to say the stock has fallen on hard times.
After the meme-fueled frenzy petered out, GameStop inexplicably pivoted to become a Bitcoin treasury company similar to Strategy, which is commonly viewed as a leveraged investment vehicle for investors looking to gain exposure to the cryptocurrency.
Those aspirations haven't amounted to much so far. GameStop made its first purchase of 4,710 tokens in May. A Form 10-Q filed with the Securities and Exchange Commission on Tuesday shows the company hadn't purchased any more Bitcoin as of Nov. 1.
It seems the stock is stuck: The Bitcoin initiative has failed to lift it higher, and financial results haven't catalyzed shares. Third-quarter earnings revealed a drop in revenue from the prior year and the falling value of its Bitcoin holdings, which were valued at $519.4 million at the end of the quarter, down from $528.6 million just a quarter earlier.
The company has failed to stage a turnaround on the heels of meme-fueled enthusiasm. Its traditional retail business has continued to face structural challenges, even as GameStop's profitability and cash position improve. So why aren't investors fretting?
The company's massive cash position likely has something to do with it. At the end of the third quarter, GameStop's cash, cash equivalents, and marketable securities stood at $8.8 billion, nearly double the $4.6 billion recorded in the same period last year. Its long-term debt was around $4.2 billion.
These substantial reserves provide the company flexibility and dispel concerns over potential bankruptcy, which used to be front of mind for investors as well as executives themselves. Former CEO Matt Furlong acknowledged the company was on the "brink of bankruptcy" leading up to the 2021 short squeeze.
This substantial cash position might explain why it hasn't gone the route of the year's most recent meme-stock darling, Beyond Meat. While GameStop's underlying retail business isn't necessarily healthy, this cash position serves to offset some worries.
Beyond Meat's fiscal third-quarter earnings report, issued in November, appeared to be the final nail in the coffin for the stock, which was briefly on course to be a hot name among retail investors.
The company disclosed at the time that its cash and cash equivalents balance, including restricted cash, came to $131.1 million as of Sept. 27. Its total outstanding debt, meanwhile, stood at $1.2 billion.
Write to Mackenzie Tatananni at mackenzie.tatananni@barrons.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
December 10, 2025 11:31 ET (16:31 GMT)
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