Why Is GameStop (GME) Stock in the Spotlight Today?

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GameStop (NYSE:GME) stock was down as much as 8% today after the video game retailer reported a surprise loss for the fourth quarter of 2021. Shares have turned around though, currently trading up 5%.

GameStop Stock: Is The Tide Turning For GME Stock?
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The Grapevine, Texas-based company reported earnings yesterday after the bell. Its results showed an adjusted loss of $1.86 per share, while analysts were looking for earnings per share of 84 cents. GameStop did however beat on revenue, reporting net sales of $2.25 billion for the quarter, up 6.2%. Analysts were looking for $2.23 billion in net sales.

Separately, GameStop said it plans to launch its own marketplace for non-fungible tokens (NFTs) later this year.

What Happened With GME Stock

The latest results shows that GameStop continues to be hit by a combination of supply chain issues and Covid-19 concerns. In its earnings press release, the company said it is continuing to work to ease negative supply chain impacts.

The market had been anticipating more news about GameStop’s plans for an NFT marketplace after reports of the project surfaced earlier this year. The company said last month that it had formed a partnership with Australian gaming startup Immutable X.

In announcing its earnings yesterday, GameStop said it would provide Immutable X with $150 million if it achieves certain milestones needed to successfully launch the NFT marketplace.

Why It Matters

Chairman Ryan Cohen, who previously founded Chewy (NYSE:CHWY), joined GameStop’s board of directors last year with plans to revive growth. Broadly, his goal has been to transform the brick-and-mortar retailer into more of a player in the e-commerce realm. This has also come alongside announcements of the NFT marketplace.

What’s Next

GameStop continues to be a troubled company with a volatile stock. Known as the original meme stock, shares have been trending steadily downward since last fall. Whether an NFT marketplace will be able to revive the company remains a big question mark.

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.


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