Short sellers have beaten up on GameStop this past year, pushing its share price down nearly 30% off of its 2013 highs, while also taking on a 26% short float of the company's shares outstanding.
The thesis for GameStop's demise revolves around the idea that most of their business is migrating online.
Digital purchases were shown to have accounted for about half of the $1.5 billion spent on games in May, according to industry-tracking research firm The NPD Group.
The worry, however, may be overblown at this point, meaning GameStop's share price -- about $40 in mid-afternoon trading Friday -- is severely undervalued.
GameStop's sales increased throughout the 2008 recession, and have stayed flat the past three years. Even as gaming has gone digital, the company managed to maintain consistent market share.
GME Revenue (Annual) data by YCharts