GameStop (NYSE:GME) stock is in focus following an insider purchase from Director Larry Cheng.
On April 8, Cheng picked up 10,000 shares of GME stock at average prices ranging between $11.21 and $11.23 per share for a total transaction value of $112,238. Following the purchase, Cheng now directly owns 8,772 shares and indirectly owns 65,088 shares through Cheng Capital.
Cheng has emerged as a strong supporter of the video game retailer through his buys. The last GameStop insider buy, excluding the one mentioned above, was also attributed to Cheng. On Sept. 8, Cheng added 6,000 shares at an average per share price of $17.65, amounting to a total of $105,926. That batch of shares is since down by nearly 40%.
Cheng has purchased a total of 21,000 shares of GME stock during the past year.
GME Stock: Director Larry Cheng Buys 10,000 Shares
Cheng is also the Managing Partner and co-founder of Volition Capital, a growth equity firm with a focus on bootstrapped and founder-led software, internet and consumer companies. He was also an early investor in Chewy (NYSE:CHWY), which was co-founded by GameStop CEO Ryan Cohen.
While Cheng’s insider purchase marks a clear message of confidence, GameStop hasn’t exactly done well in 2024. During the fourth quarter, net sales tallied in at $1.794 billion, down by 19.4% compared to $2.226 billion a year ago. For the full year of 2023, sales declined by 11% to $5.273 billion from $5.927 billion. At the same time, the company was able to churn out net income of $6.7 million compared to a loss of $313.1 million year-over-year (YOY).
GameStop’s sales decline isn’t exactly surprising. With the proliferation of the digital age, video games are more frequently being bought online instead of in person.
“An increasing mix of digital downloads is hurting physical retail, and there is simply no reason to go to the store if a consumer can just order a game and download it immediately,” said Wedbush analyst Michael Pachter.
For 2024, analysts expect sales to fall by 6.5% to $4.93 billion. The company is also expected to post its second-straight year of profitability with a GAAP EPS of 3 cents.
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.
