This Is What Happened to the GameStop Mania

Joe Weisenthal (0:10)

Hello, and welcome to another episode of the Odd Lots Podcast. I'm Joe Weisenthal.

Tracy Alloway (0:16)

And I'm Tracy Alloway.

Joe Weisenthal (0:18)

You know, Tracy, we talked recently about the aftermath of the Memestock Mania. But even within the Memestock Mania, there were some stories specifically that were just really extraordinary and worth revisiting.

Tracy Alloway (0:30)

Oh, absolutely. I mean, each one of those individual sort of stonks was fascinating to watch.

But among them all, I feel like GameStop has to, like that one has to stand out because that's where it started.

Joe Weisenthal (0:43)

So the two big ones were, I think, GameStop and AMC. I mean, there were others, but those were like the two big ones. And I have to say, like, my heart was always a little bit more with the GameStop one because-

Tracy Alloway (0:56)

Really?

Joe Weisenthal (0:56)

Yeah, absolutely. Because I always thought like, well, there was at least like this sort of like, there was a thesis that had long proceeded the boom. There was a catalyst with the stake held by Ryan Cohen, the Chewie founder.

AMC, it was just like a little too nihilistic for my taste.

Tracy Alloway (1:12)

Well, now, first of all, Ryan Cohen came in kind of late, I would say, after a lot of this had already happened. But I was always partial to AMC just because I really liked going to the movies. I liked that people were throwing money at it at a time when it wasn't really clear if it was gonna survive.

Whereas GameStop just seemed like another brick and mortar video game retailer.

Joe Weisenthal (1:35)

Right, but okay, we're gonna keep arguing about this. With GameStop, there was like a crew of people who...

The AMC thing sort of came out with nowhere. So all through 2020, long before the spike and like January and February of 2021, there was a community of people putting together this idea that there was something that the market misunderstood GameStop. The market viewed this as a brick and mortar retailer in terminal decline, an eventual zero. And at least there was some contingent of people who, A, thought it wasn't going to be that.

And B, the whole sort of like short squeeze engineered on Wall Street Bets was like a GameStop thesis originally. Like the famous post was about there is an opportunity in GameStop specifically.

Tracy Alloway (2:18)

I remember having this argument with you last year, which was, was it purely a technical squeeze or was there some sort of fundamental bull story embedded in GameStop? And I mean, I got to say, so obviously the share price has come down quite a lot since early 2021 However, looking at it now, it's still above $100 per share. It's almost $130 per share compared to around like $15 when we started.

So even if it was a technical squeeze, something has changed and someone in the market clearly sees more value there.

Joe Weisenthal (2:53)

So in summer of 2020, it was like a $5 stock. Then it rocketed to like 350, so a 70 bagger in a few months. It has come way down, but it's still at 126, so well ahead of where it was pre-squeeze.

So the question is like, what's going on? Is there something real? Did it actually happen and what all happened at GameStop?

Tracy Alloway (3:13)

Right. And how did the meme stock frenzy actually feed into that? Did it actually have a fundamental impact on the company, the health of the company itself?

Joe Weisenthal (3:21)

All right. So today we're going to be revisiting GameStop and we are going to have a guest back who we had on early 2021 last time, but also he was one of the true GameStop longs. He didn't just come in at the peak, like, you know, he's not, he doesn't just ape into it. He had a thesis, he was a bull, he argued for many months that it was a misunderstood stock and he made a lot of money.

And we're going to revisit the GameStop story. We're going to be speaking with Rod Alzmann, who is the managing director of Wook Capital. And he's the co-founder of gmedd.com, which sort of has long cataloged, the long GameStop thesis.

So Rod, thank you so much for coming back on Odd Lots.

Rod Alzmann (4:05)

Thanks for having me back. A lot less stressful recording it today than when we recorded it at the peak of the mania.

Joe Weisenthal (4:11)

Those were wild times, because I think like we recorded an episode and news broke in the middle, or like, you know, we were talking to you, right? We were talking to you and something happened in the middle of the conversation and it was like, it moved 50%. I don't remember what it was because that time was so crazy, but those were fun times.