GameStop stock price dropped on Wednesday. After reporting a loss for the fiscal third quarter that was slightly worse than projected, the management of GameStop stated that the business might investigate potential acquisitions.
GameStop (NYSE:GME) announced an adjusted loss of 31 cents a share for the October quarter. Analysts from FactSet had predicted a loss of 28 cents a share for the October quarter. The company’s sales came in at $1.186 billion, which was lower than the $1.345 billion that was anticipated.
During the same period, hardware and accessories sales decreased to $627 million from $670 million in 2021. Software sales came in at $352.1 million, representing a fall of 19% year over year. The collectibles market experienced a rise in revenue of 8%, reaching $207 million.
Gamestop Stock Price After the Announcement
Immediately following the announcement, after-hours trading saw a 1.3% drop in GameStop shares, sending it to a price of $21.97. On Thursday morning, before the market opened, the share price increased by 1.9%.
The meme stock has had a challenging year as a whole. As of the closing of trading on Wednesday, GameStop stock has lost forty percent this year. The tech-heavy Nasdaq Composite has experienced a fall of 30% over the same period.
While the results call for the company, Chief Executive Officer Matt Furlong stated that the company does not provide official financial guidance. In addition, GameStop’s CEO stated that the company would be interested in investigating the possibility of acquiring if a strategic asset became available at an attractive price.
It may be a surprise that GameStop’s business has yet to benefit more from a recent spate of positive news regarding its software sales. Activision Blizzard (ATVI) announced late last month that its latest Call of Duty game, Modern Warfare II, has become the fastest-selling title in the franchise’s twenty-year history, reaching $1 billion in sales during its first ten days of release. This makes the game the fastest-selling title in the franchise’s history. Two weeks later, Sony also stated that God of War Ragnarok had been the fastest-selling game ever developed by one of its internal studios in its first week of release. This news occurred two weeks after the game was released.
A continuous trend among gamers to purchase titles digitally straight from console-maker stores rather than traveling to local GameStop stores to acquire physical game discs may be a part of why this is happening.
The sentiment on Wall Street regarding GameStop stock has been predominantly negative. According to FactSet, out of the three analysts who rated the stock, two gave it a Sell or similar rating.
Featured Image- Unsplash @ Michael Förtsch