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Investors are finally getting a peek at GameStop’s basics after a Reddit-fueled trading frenzy earlier this year.
Here’s what the company did after Tuesday’s bell.
- It published quarterly results that missed Wall Street’s estimates.
- In its latest executive shake-up, the company named former Amazon and Google executive Jenna Owens as its new chief operating officer.
- And in a hint of the transformation that got some investors excited about the stock, the company said global ecommerce sales were up 175% in the past quarter, accounting for more than a third of sales in the period.
- GameStop also acknowledged in a filing that it was considering selling additional shares.
The stock initially traded higher after the bell, but last fell around 7%, with traders likely responding to news of the possible stock sale, a move many investors and analysts believed would be wise given the Reddit-fueled run-up in the share.
“As of January 2021, we are evaluating whether we need to increase the size of the ATM (at-the-market) program and whether we may want to sell shares of our Class A Ordinary Shares under the increased ATM program during fiscal 2021, primarily to fund the acceleration of our future transformation initiatives and overall working capital needs, ”said an application from the company. “The timing and amount of sales under the ATM program would depend, among other things, on our capital needs and alternative sources and costs of capital available to us, market perceptions about us and the then-current trading price of our Class A Common Shares. “
For the period ending January 2021, GameStop earned $ 1.34 per share on revenues of $ 2.12 billion. Wall Street expected GameStop to report earnings per share of $ 1.35 on revenues of $ 2.21 billion, according to Refinitiv’s average of the six analysts covering GameStop.
This is GameStop’s first adjusted quarterly profit since the fourth quarter of 2020. GameStop’s fourth quarter revenues typically make up the majority of the company’s annual revenues, driven by holiday sales. Same-store sales at GameStop were up 6.5%.
“We are on track to a strong start in 2021 as comparable store sales grew 23% in February, led by continued strength in global hardware sales. this emerging console cycle, ”said George Sherman, CEO of GameStop in the press release.
Tuesday’s earnings mark GameStop’s first quarterly report since GameStop’s trading mania in January.
In January, an epic brief push in GameStop’s stock shook Wall Street and drew attention to an emerging class of retail investors on social media platforms like Reddit. GameStop’s stock price shot up to $ 483 per share and then lost 90% of its value. The controversy caught the attention of Wall Street and Washington.
Since GameStop’s rise and fall in January, the stock has continued to rise, with stocks up nearly 70% this month. GameStop’s stock is up more than 860% in 2021.
GameStop has a market cap of nearly $ 14 billion, more than 10 times the market value of $ 1.3 billion the stock had at the end of last year. A year ago, GameStop’s market cap was $ 245 million.
GameStop’s stock has acted positively over the past five months on new developments for the company, such as the appointment of Chewy co-founder Ryan Cohen to the Board of GameStop and a focus on GameStop’s technology and e-commerce transition.
Earlier this month, GameStop announced it is tapping into Cohen to lead the shift to ecommerce. Cohen chairs a special committee formed by the GameStop board to help its transformation. Board members Alan Attal, Chewy’s former top operations manager, and Kurt Wolf, Hestia Capital Management’s chief investment officer, are also on the committee.
The committee has already appointed a chief technology officer, hired two executives to lead customer service and e-commerce fulfillment, and is looking for a new chief financial officer with tech or e-commerce experience. GameStop previously announced that current CFO Jim Bell will step down on March 26. Citing sources familiar with the case, Business Insider reported that Bell was pushed out by Cohen.
GameStop said on Tuesday that chief customer officer Frank Hamlin will step down.
The company said it continues to suspend guidance.