GameStop jumps 10% despite 3rd-quarter earnings miss as CEO says the meme-stock favorite will consider acquisitions
- GameStop stock jumped 10% on Thursday despite the game retailer's third-quarter earnings miss.
- The meme-stock favorite's CEO said that the company is considering acquisitions.
GameStop stock surged 10% on Thursday despite the video game retailer's weak fiscal third-quarter earnings.
Late Wednesday, the meme-stock favorite reported a loss of 31 cents a share on sales of $1.19 billion. Comparisons against Wall Street forecasts are tricky as the consensus consisted of only two estimates, but analysts predicted a loss of 29 cents a share on sales of $1.39 billion.
The company's cash and cash equivalents also shriveled to just $804 million from $1.4 billion a year ago, according to results from the quarter ending on October 29.
But CEO Matt Furlong said GameStop is eyeing potential acquisitions in a mission to "accomplish something unprecedented in the retail sector."
"Maintaining a sizable cash position will maximize our optionality and keep us strong against the challenging economic backdrop," he said on an earnings call Wednesday. "If a strategic asset or complimentary business becomes available in the right price range, we want to be able to explore those acquisitions."
GameStop shares saw a massive rally in last year's meme-stock craze, helping the company come back from the brink of bankruptcy. It's now seeking to transform from a brick-and-mortar chain to focus on e-commerce and crypto.
But the meme-stock trend has died down, and despite Thursday's rally, GameStop shares are down 35.8% year-to-date.
The third-quarter earnings miss follows reports of forthcoming layoffs of staff focused on its crypto-focused efforts, according to Axios on Monday. GameStop launched a non-fungible token, or NFT, marketplace earlier this year, including its own crypto wallet.
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