Three weeks ago, GameStop was known to many as a struggling brick-and-mortar video game retailer desperate for customers to walk through the door.
What a difference an Internet-based short squeeze makes.
As of Friday afternoon the company is valued at $13.5 billion, thanks in part to Reddit retail investors who have collectively helped the stock achieve an over 400% gain over the past week.
None of this has gone unnoticed by former GameStop
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employees.
Kai Foster, 23, was hired during the holiday season of 2016. Right after Christmas, Foster was told, “they had no more room in the payroll” for them.
“I didn’t really mind as they weren’t giving me enough hours to really even save money,” Foster said. They now works as a freelance writer based in Nothern California.
If Foster was still working for GameStop during its massive rally, they “would have been outraged by the company,” because they weren’t given employee stock purchasing benefits.
Opinion: GameStop and AMC show why you should practice trading before playing with real money
“I’ve since worked at other corporations that allowed stock buy-in, and active information on our market leanings. I got none of that at GameStop even if I had stayed.”
Asked if the company is worth its current market value, Foster responded, “not at all.”
“GameStop’s ability to thrive was largely based upon these recurring payments and up-charges,” Foster told MarketWatch. “Our sales strategy was manipulative and it was communicated to me directly that the main way we would make money is by sort of barraging customers with pre-orders and subscriptions.”
Foster said it’s an “entirely artificial” way of raising the share price “that has little bearing on its ability to make revenue.”
GameStop did not respond to MarketWatch’s request for a comment.
Keith Carberry, 28, who worked at GameStop for half a year in 2015 earning $11 an hour, said he is not outraged by GameStop’s rally.
Individual retail investors, like those who are part of the Reddit group WallStreetBets, have profited off trading the stock, while hedge funds that shorted the stock have taken a huge hit, he said.
“I have no doubt that the risks are higher for these retail investors, many of whom are bandwagoning and will lose money that is truly important to them,” he told MarketWatch.
But denying them the opportunity to trade, as Robinhood did on Thursday temporarily barring users from purchasing shares of GameStop, is far more problematic, Carberry said.
Carberry, who is based in Providence, R.I., said he stopped working at GameStop shortly after he began dating a coworker and his managers asked him to work at a different store.
Like Foster, he worked several retail jobs other than at GameStop. But unlike Foster, he said working at GameStop was his favorite.
He now works full-time on Run Button, his YouTube
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gaming channel and podcast.
