Things have gone from bad to worse for meme stock favorite GameStop (NYSE:GME) after its latest earnings miss.
GME stock is down 6% today in morning trading after the video game retailer reported that its net loss widened to $105.4 million in the third quarter, or $1.39 per share. This compares to a loss of $18.8 million, or 29 cents per share, a year earlier. The company also declined to provide any forward guidance and announced that it continues to explore new ventures that include blockchain and non-fungible tokens (NFTs) as it seeks to pivot away from its traditional brick-and-mortar retail.
Investors are clearly underwhelmed by the latest earnings report from GameStop. However, at its current share price of $163, GME stock remains up more than 750% this year, mostly owing to its status as a meme stock.
Here are six key takeaways from GameStop’s Q3 report.
6 Key GME Stock Takeaways
- GameStop reported that its total revenue grew to $1.3 billion in this year’s third quarter from $1 billion a year earlier. This comes as it expands relationships with brands such as Samsung and LG.
- The company said it raised its inventory levels in the third quarter to get ahead of global supply chain constraints and ensure that it is prepared for the holiday shopping season when video games are traditionally hot items. At the end of Q3, GameStop’s inventory was valued at $1.14 billion, compared with $861 million at the same time last year.
- GameStop said that it has opened new corporate offices in Seattle and Boston to be closer to top talent in the technology space. The company also said that it has hired more than 200 senior employees from top tech companies and expanded more into personal computing games to lessen its reliance on consoles.
- Neither company CEO Matthew Furlong or COO Mike Recupero, each of whom was hired away from Amazon (NASDAQ:AMZN) earlier this year, answered questions on GameStop’s third quarter earnings call with analysts.
- In a news release, GameStop said it is “exploring emerging opportunities” that include blockchain, NFTs and Web 3.0 gaming. The company did not elaborate on what those opportunities might be.
- Lastly, the company shared that it received a subpoena from the U.S. Securities and Exchange Commission in August. This subpoena regards its share trading activity earlier this year.
On the date of publication, Joel Baglole did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
