GameStop's 2021 got off to a tumultuous start thanks to r/WallStreetBets on Reddit and the sudden surge in stock prices in January. While some were able to score big thanks to the spike, GameStop was still left to wonder what the future holds as the video game retailer tries to outline a path forward to stay alive. The path forward appears to be finally taking shape and GameStop will turn to its unstable stock to help fund that future.

GameStop's stock surge to open 2021 was thanks, in part, to a squeeze driven by day traders using information provided on r/WallStreetBets. This occurred shortly after Chewy CEO Ryan Cohen joined GameStop's executive board, causing a small rise in company stock. However, some independent trade analysts noticed large brokerages shorting GameStop's stock and opened the door to a "short squeeze" where investors could capitalize in a short stock spike and force the brokerages to cover their losses.

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The "short squeeze" led to over $6 billion in losses for the brokerages, multiple lawsuits, and ongoing federal investigations into the fiasco. Multiple films and shows are also in the works about the insanity surrounding GameStop's stock rise.

Exterior shot of a Gamestop store with a man stood outside on his phone

While many were able to capitalize on the squeeze, GameStop was unable to initially capitalize on it due to federal regulations. The door appears to have opened as the retailer said Monday it was looking to sell 3.5 million shares of stock for potentially hundreds of millions of dollars depending on stock prices at the time. In a press release via GameSpot, GameStop said the mass stock sale would be used to speed up its "transformation" plan to ensure the company survives in an increasing digital retail space.

Ryan Cohen spoke about these "transformation" plans in March as he leads GameStop's transition to e-commerce. While he didn't share specific details, he pointed to digital game retailer Steam as one of the outlets it was looking to model itself after in digital sales and become a potential competitor. He also teased GameStop transitioning into a "technology business," but was again vague about what that meant for the company's future.

GameStop's planned stock selloff is simply the latest in what has been arguably the most tumultuous year in the company's history. The stock fiasco brought a renewed interest in GameStop at a time when its future was looking bleak. It remains to be seen if these "transformation" plans will pay off in the long-term for GameStop, though the plans Cohen and other executives have teased since January show they are committed to keeping the company alive.

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Source: GameSpot