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We recently witnessed the frenzy surrounding the surge in the share price of GameStop Corp (GME), a Dallas-based video gaming retailer. Before the escalation of the stock price, GameStop was not attracting much investor attention. Even though GameStop is using online channels for its retail distribution, they do not have an obvious competitive advantage. A similar story was Blockbuster; a once good company but without an appropriate response to technological changes, failed miserably. GameStop had been losing money in 8 of its past 10 quarters. Then what caused GameStop’s share price to increase by 1,600%?
