GameStop reports its earnings today. What to expect.
reports the results, expected after the close on Wednesday, Wall Street will want to know more about the video game retailer’s cash burn and updates on its platform for non-fungible tokens.
GameStop stock (ticker: GME) has fallen over 30% this year. The shares have traded between $19.40 and $63.92 over the past 12 months. That’s on an adjusted basis as the company split its shares 4-for-1 in July.
The stock surged in January 2021 after retail investors posted on online forums like Reddit’s WallStreetBets, which helped spark a boom in shares of heavily shorted companies. The initial leap began after Ryan Cohen joined
plank. Since then, GameStop has seen a reshuffle of the board and management. Cohen became the chairman of the board last year.
Cohen threw all his
Bed bath and beyond
(BBBY) stake last month after launching an activist campaign earlier this year that drew comparisons to its GameStop stock.
Under new CEO Matt Furlong, GameStop has sought to invest in customer service and fulfillment capabilities. He also bet on NFTs by creating a wallet and market which launched over the summer.
But the company hasn’t reported a profitable quarter since the period that ended in January 2021. Analysts expect this trend to continue in the July quarter of this year with an adjusted loss of 42 cents per share. Wall Street’s consensus estimate calls for sales of $1.27 billion in the second fiscal quarter, compared to $1.18 billion in the same quarter last year.
The wildcard is GameStop’s NFT aspirations. Analysts are skeptical whether such investments can be a turning point for the retailer. Its traditional business – the sale of new and used video game discs – has suffered as gamers have turned to digital downloads. A broader decline in video game industry sales hasn’t helped matters either.
The company announced corporate layoffs and the departure of chief financial officer Mike Recupero in a July 7 memo to employees. In a memo last month seen by Barronsthe company announced a $21,000 time-based equity grant for store executives that vests over three years.
Still, the content of Wednesday’s report might not matter for the headline. As is the case with most meme stocks, being in the news could be enough to send stocks into a wild ride.
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