WHO IS BEHIND GAMESTOP? – an idiot’s guide.

An idiot's guide to gamestonks: https://rumble.com/embed/varuqz/?pub=4Show more

WHO IS BEHIND GAMESTOP?
– an idiot’s guide.

Hi! This is Kodo with Kodoan. You can find out more about me at kodoan.com.

That’s K O D O A N DOT COM.

If you keep hearing about GameStop and were kinda hoping for an “idiots guide” version of who is behind it – heads up! this might be just what you’re looking for!

Three days ago, I made a video giving an overview of what GameStop is. I’ll leave a link in the description below to that video for those of you who want to brush up on your GameStonk. Today, however, I’ll explain more about “who”….exactly...Gamestop is.

GameStop, the now infamous American video game retailer who was, up until a month ago, most famous for how stingy they were in paying people for their used video games, started out in life way back in 1983 in Dallas, Texas. Back then, it was called Babbage’s Inc.

Babbage’s was a clever name to give a computer products store as it was named after the English genius Charles Babbage, who was credited with creating the world’s first computer. Charles Babbage was Born on December 26th 1791 and died on October 18th, 1871. Being elected a Fellow of England’s Prestigious Royal Society in 1816, Babbage was a brilliant mathematician, philosopher, inventor and mechanical engineer. He invented the “difference machine” – a sort of precursor to the modern calculator and then the “analytical Engine” which was basically a low-level, fully functional, general purpose computer.

“OK”, you say, “I got it...Babbage...smart guy, clever name...get on with it.”

Sorry, just thought that was some cool background stuff – OK, back to the Idiot’s Guide!

Babbage’s the company, started out as an idea between two Harvard Business School classmates; James B. McCurry and Gary M, Kusin in the mid-1970s. They talked about going into business together but ended up going their separate ways after graduation. However, in 1982, McCurry approached Kusin with a business proposal to establish a chain of software stores that would capitalize on the growing home computer and video game industries.

McCurry, who was working as a consultant for the San Francisco office of Bain & Company, believed a specialty store for computer equipment and games would be a hit. Kusin, who at the time, was a general merchandise manager for the Sanger-Harris division of Federated Department stores based in Dallas, had been watching these exact type of stores gradually take over more and more of the department store business. He jumped on board and, by the end of the year both men quit their jobs and began seeking financing for their new idea.

There was no “shark tank” back then to pitch their idea and none of the venture capitalists of that time seemed interested. That is until February of 1983, when Texas billionaire and later 1996 Reform Party Presidential candidate Ross “Call Me Ross” Perot offered to provide a $3 million dollar credit line in exchange for a one-third ownership in the company.

Perot, who knew Kusin’s family back in Texarkana, advised the entrepreneurs to shelve their plan for immediately opening twenty stores in favor of establishing just one outlet – which they would manage themselves until they knew the business inside and out.

Taking both Perot’s money and advice, Babbage’s was filed with the Texas Secretary of State as a Domestic For-Profit Corporation on Monday, April 4, 1983 (Texas State ID: 64995100) and McCurry and Kusin opened the first Babbage’s in a Dallas regional mall on Monday, May 30th, 1983 – Memorial Day.

McCurry, the company’s chairperson, managed the company’s finances, while Kusin, the company’s president, acquired software products from local distributors. Both partners took turns opening and closing the store and seeing to other administrative details.

McCurry and Kusin focused on a constantly updated mix of products, a competitive pricing system, a flexible store design and an enthusiastic, non-commissioned sales staff that would not intimidate customers with technical jargon.

Two months after opening the first Babbage’s store, McCurry and Kusin met their sales projections and hired their first full-time employee – Mary Evans. Evans would later go on to become vise president of stores. Between Labor Day and Thanksgiving of 1983, Evans helped open and manage four more Dallas-area stores.

Babbage’s set a precedent of selling entertainment software for the most popular video game systems of that time; the Atari 2600 – featuring….count ‘em…. four-color graphics! Eventually, Atari was superseded by Nintendo and the Sega SC-1000.

It took Babbage’s about three years to break even but, by July 1988, it was successful enough to “go public” and offer publicly traded stock on the NYSE. After this, Perot wisely cashed in his stake in the company. Sales were up, then down until, by early 1990, Babbage’s stock had plummeted to $5 dollars a share from its 1988 opening of $13 dollars.

Opal P. Ferraro (you might want to remember that name) joined Babbage’s in 1986 as controller, was named chief financial officer in 1991, and two years later, joined McCurry and Kusin as the only other company officer on Babbage’s board of directors.

1991 saw the company in improved financial shape. Babbage’s boosted its number of stores from 178 to 204 and saw reported earnings of $5.58 million dollars on sales of $168.3 million dollars.

However, just like most marriages today, this boost didn’t last forever and, by 1994, Babbage’s was forced to get into a tricky situation by merging with Software Etc.

Software Etc was filed as a Foreign Business Corporation in New York on Friday, February 12, 1988. It’s President was Daniel Dematteo (you’ll definitely want to remember that name), it’s Vice President, it’s Treasurer was Opal Ferraro (sound familiar?), and one of it’s Directors was James B. McCurry (you should already know that one by now...seriously). It’s CEO was listed as Leonard Riggio (you’ll want to remember that name too).

The new Babbage’s/Software Etc, merger resulted in the creation of NeoStar Retail Group. NeoStar Retail Group was filed as a Foreign For-Profit Corporation in the state of Texas on Monday, November 21, 1994. It’s President was Daniel Dematteo, it’s Treasurer was Opal Ferraro, one of it’s Directors was James B. McCurry and another of it’s Directors was Willard Mitt Romney, the current Senator from the state of Utah.

NeoStar was formed as a holding company which means that it doesn’t produce goods or services but merely owns shares of other companies to form a corporate group. In effect, it functions like a single person that owns stock but with all of the advantages of a corporation. Like Willard Mitt Romney used to say, “Hey! Corporations are people too!”