Vanguard Is Doubling Down on GameStop (GME) Stock

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  • Vanguard has disclosed ownership of 24.66 million shares of GameStop (GME) as of Dec. 30.
  • The ETF provider owned 24.16 million shares as of Q3.
  • GME stock is up by more than 10% year-to-date.
GME stock - Vanguard Is Doubling Down on GameStop (GME) Stock

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In terms of news, GameStop (NYSE:GME) has been unusually quiet this year, while shares of GME stock are up by more than 10% year-to-date. The latest press release details the retailer’s earnings for the third quarter of fiscal year 2023.

During that period, GameStop reported net sales of $1.186 billion, down from $1.297 billion a year ago. Gross profit tallied in at $291.6 million, while selling, general and administrative expenses were $387.9 million. That led to a net loss of $94.7 million compared to a net loss of $105.4 million the previous year.

GameStop’s popularity among meme stock traders seems to be fading. Shares of the company are down more than 35% year-over-year, while social media sentiment appears to be cooling down as well. However, the addition of more shares by an exchange-traded fund (ETF) provider may spark a light for some investors.

Vanguard Increases GME Stock Position

According to an amended Schedule 13G filing, Vanguard owns a total of 24.66 million shares of GME as of Dec. 30, equivalent to an 8.1% ownership stake. As of Q3, the firm owned 24.16 million shares, meaning it purchased about a half a million shares during Q4.

Still, it should be noted GME accounts for just 0.01% of Vanguard’s total portfolio and is the firm’s 946th largest position. In other words, a drop to $0 for GameStop would have an unnoticeable impact on Vanguard.

Vanguard isn’t the only major institutional investor to add shares during Q4. BlackRock (NYSE:BLK) reported owning 21.97 million shares as of Q4, up from 20.95 million shares during Q3. Like Vanguard, GameStop accounts for a minuscule amount of BlackRock’s portfolio with an allocation of just 0.02%.

So, how do GameStop’s insiders feel about their company? In the past year, insiders have purchased 401,923 shares and sold off 3,914 shares. That amounts to a net activity of 398,009 shares purchased. In the past three months, insiders have neither bought nor sold any shares. The last insider transaction is attributable to CFO Diana Saadeh-Jajeh, who sold 1,347 shares in order to satisfy tax withholding obligations related to the vesting of restricted stock units (RSUs).

For the upcoming quarter, analysts are forecasting revenue of $2.18 billion and an earnings per share (EPS) loss of 13 cents. Profitability will remain a major focus for the company as we head deeper into the year.

On the date of publication, Eddie Pan did not hold (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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