Why the GameStop brand?By Tom Dougherty
29 January 2021
Why the GameStop brand: The stock breaking the short sellers
I won’t go deep into the stock-buying frenzy around the GameStop brand currently pushed by those angry with Wall Street and posting on Reddit. Here’s a good explainer from the Associated Press, if you want the details.
But I am curious. Why GameStop?
Reports suggest it’s just a coincidence. That is, it was picked because its stock price was so low. And, in a complicated but sly process, raising the stock price hurts short sellers, hedge fund managers and the like. You know, the ones who caused the recession years ago by betting on companies (and mortgages) failing. (Check out the movie, “The Big Short,” is see what happened.)
It’s also the reason why BlackBerry and American Airlines are seeing their stocks snapped up. The stock-buying groups, one of which is called “WallStreetBets,” chose those stocks because they knew short sellers would be making money on them when they bottomed out.
But I can’t help thinking why those chose the GameStop brand, in particular. Of all the crappy stocks to build up, why that one?
As brand strategists, we know people act based on emotion. Oh, we backfill our reasons for action (and choice) with rational answers. But there’s always an underlying emotion few of us know powers us.
“The GameStop brand is facing that same situation. As gamers move away from the physical media of gaming, the retailer hasn’t become a player in the online arena. And it might be too late.”
The GameStop brand must act right now
With that in mind, let’s look at GameStop. The brand feels a little bit by RadioShack a few years ago. As we’ve detailed in an epic, new web story, RadioShack failed to adapt to change. So it went from a leader to an e-commerce site that mainly supplies Hobby Town in nothing flat.
The GameStop brand is facing that same situation. As gamers move away from the physical media of gaming, the retailer hasn’t become a player in the online arena. And it might be too late.
Like RadioShack, it’s only made superficial changes. The stock-buying spree won’t help it much, if at all.
But, like RadioShack when it had an opportunity to act, there is brand equity in GameStop. For years, it was the mecca for gamers to swap out games. Remember, though, RadioShack once held brand equity too. It failed to take advantage.
So, I wonder if those WallStreetBets are demonstrating an emotional preference by focusing on the GameStop brand. I wonder how many of them planning on Reddit are gamers who once coveted the brand.
Emotion plays a part in this. And GameStop, now with its profile suddenly raised, would be wise to adapt now. Slay the sacred cows, put everything on the table and completely rebrand. Think of cheers from the gallery if that happened.
The time is now.
Click For the GameStop Web Story
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