GameStop Shares Drop in Loss, Another Earnings Call Leaves Questions Unanswered

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GameStop Shares Drop in Loss, Another Earnings Call Leaves Questions Unanswered


GameStop share fell after hours on Wednesday, after the video game retailer reported a larger-than-expected loss per share, but revenue exceeding expectations.



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The results for the original memes stock are coming in as spending on video games increases. But they also come as the company, like other retailers, grapples with questions about the struggling global supply chain and how to adapt to a digital world. But GameStop continued its tradition of revenue by not answering questions.

Gains GameStop

GameStop reported revenue of $ 1.297 billion, higher than FactSet’s estimate of $ 1.189 billion. Year-by-year comparisons have become more difficult as more GameStop stores reopened in late 2020.

The company lost $ 1.39 per share. It was worse than the loss forecast of 52 cents per share.

The retailer ended the quarter with cash and cash equivalents of $ 1.413 billion.

GameStop said it had $ 1.141 billion in inventory at the end of the quarter, reflecting its “focus on leading investments in inventory to meet increased customer demand and alleviate supply chain issues. supply “.

GameStop Stock

At the end of the session, GameStop shares fell 3.25% to 168 on the stock exchange today, after losing 2.3% during Wednesday’s regular trading. GME shares jumped 6.4% on Tuesday.

The GME stock is below its 50-day and 200-day lines. The stocks have a poor composite rating of 52. Their EPS rating is 44.

Meme comrade stock AMC Entertainment (AMC) was down 1.9% in overnight trading. AMC stock rose 4.2% on Wednesday, recovering its 200-day line, following Tuesday’s 7.8% gain.

GameStop action skyrocketed earlier this year and has traversed less dramatic peaks and valleys since then. GME stock is well below the January high of 483. But stocks are still up over 800% year-to-date. GameStop’s stock is well above pre-2021 levels.

The exact identity of the investors behind these moves has not always been clear during this time. But what started as a revolt of retail investors against short sellers betting against a handful of stocks has grown to target the likes of Robin Hood (HOOD) and, more recently, Fidelity, after trade restrictions and wider suspicions of being misled and cheated.

Digital transformation?

In the midst of this tidal wave, the video game retailer raised funds through offers of GameStop shares, helping to strengthen its balance sheet.

But some analysts have questioned whether GameStop was designed for an environment where more sales and games occur online. Recent post-benefit conference calls have been brief – and without questions and answers. Wednesday’s call was no different. The company did not immediately respond to a request for comment.

GameStop has taken steps to expand its distribution footprint, making deals to lease space from distribution centers in Pennsylvania and Nevada. The company said the facilities would help it handle more online orders, expand its product line, and ship goods faster. GameStop recently named two Amazone (AMZN) veterans as CEO and CFO.

“Slight drop” among players?

U.S. consumer spending on video game products from July through September rose 7% to $ 13.3 billion, according to the NPD Group, a market research company. The PlayStation 5 and Xbox Series consoles have helped drive that demand, as have subscriptions and mobile games, according to NPD.

The firm said the market had seen “a slight decline” in the number of players overall. But he said those who play play longer and spend more than a year.

Elsewhere, chip shortages have disrupted product releases and the availability of game consoles, Dave Egan, analyst at Columbia Threadneedle, said in October.

Other issues in the shipping supply chain have increased transportation costs and increased the risk of delays, especially during the holiday shopping season.

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