reported earnings, expected after its closing Wednesday, Wall Street will want to learn more about the video game retailer’s cash burn and updates to its platform for non-functioning tokens.
GameStop stock (ticker: GME) is down more than 30% this year. Shares have traded between $19.40 and $63.92 in the past 12 months. That’s on an adjusted basis because the company split its shares 4-for-1 in July.
Shares rose in January 2021 after retail investors on online forums such as Reddit’s WallStreetBets sparked an explosion in shares of heavily shorted companies. The first jump started after Ryan Cohen joined
plate. Since then, GameStop has seen an uproar from board and management. Cohen became chairman of the board last year.
Cohen dumped his whole
Bed Bath & More
(BBBY) bet last month after launching an activist campaign earlier this year that drew comparisons to its GameStop actions.
Under new CEO Matt Furlong, GameStop has looked to invest in customer service and fulfillment capabilities. It has also bet on NFTs by building a wallet and marketplace that launched over the summer.
But the company has not reported a profitable quarter since the period ended January 2021. Analysts expect that trend to continue in the July quarter of this year with an adjusted loss of 42 cents per share. The Wall Street consensus estimate calls for revenue of $1.27 billion in its fiscal second quarter, up from $1.18 billion in the year-ago quarter.
The joker is GameStop’s NFT aspirations. Analysts were skeptical about whether such investments could be a turning point for the retailer. The traditional business – selling new and used video game discs – has suffered as players move to digital downloads. A wider sales slump for the video game industry hasn’t helped things either.
The company announced layoffs and the departure of Chief Financial Officer Mike Recupero in a July 7 memo to employees. In a memo last month viewed by Barron’sthe company announced a time-based stock grant of $21,000 for store leaders that will vest in three years.
Still, the contents of Wednesday’s report may not be relevant to the stock. As is the case with most meme stocks, being in the news can be enough to send stocks on a wild ride.
Write to Connor Smith at [email protected]