Gaming the system: How GameStop stock surged 1,500% in nine months

Enlarge / When will this stock [game]stop rising? (credit: Aurich Lawson)

Nine months ago, GameStop stock bottomed out at $2.80 a share, a reflection of the myriad problems facing the retailer specifically and brick-and-mortar game retail as a whole. As of Tuesday morning, though, that stock price is hovering around $40 a share (peaking at $44.74 as of this writing), with the vast majority of those gains coming in the last couple of weeks.

Is GameStop really worth up to 16 times as much as it was back in April? Is the company’s ambitious turnaround plan finally (and suddenly) turning things around? Is GameStop roaring its way back to the nearly $10 billion market cap it enjoyed at the height of the Wii phenomenon?

Probably not. Analysts suggest the recent surge in GameStop’s stock price is the result of a massive short squeeze bubble which will pop eventually. But beyond the sky-high valuations of recent weeks, analysts also suggest there’s some reason to believe GameStop’s long-term health is more robust than last year’s stock doldrums suggest.