GameStop May Now Avoid Bankruptcy

Nearly all retail industries took a huge hit to profitability, and sustainability, last year amid the pandemic challenges. Many have been preparing for Chapter 11 bankruptcy to restructure their debts and remain in business. In fact, the nation-wide video game retailer, GameStop, moved towards debt resolution in February of last year after closing some 800 stores around the country. Today, the financial outlook for GameStock has flipped on its head entirely overnight.

Trading Spaces

Until earlier this week, GameStop was another retailer hit by the rapidly growing game segment beyond their current technology scope sinking deeper into financial ruin. A group of consumers organized on social media to orchestrate a massive stock purchase of GameStop shares. These purchases resulted in GameStop stock shares soaring by triple digits in under a day.

This recent boom of trading GameStop stock may now position the retailer to resolve its debts directly without the need for debt restructuring in bankruptcy. However, financial experts are concerned about the implications of whether the company will be able to return to lucrative operations in the long run? The recently run-up stock prices are sure to fall; and, with an unpredictable bottom, the fate of GameStop is still to be determined.