GameStop's judgment day is here
Shares have soared 932% this year
GameStop Corp. is set to deliver its first set of quarterly results since the Reddit-trading frenzy caused its stock price to soar.
Shares of the Grapevine, Texas-based video-game retailer have spiked 932% this year, closing at $194.49 apiece on Monday. They hit an intraday high of $483 on Jan. 28 as traders on the Reddit message board WallStreetBets banded together to squeeze short-sellers.
The short squeeze was sparked by news that Chewy founder Ryan Cohen’s investment firm RC Ventures had amassed a major stake in GameStop with the goal of transforming the company into an e-commerce giant that sells a wide variety of merchandise with fast shipping. The firm now controls 13% of shares.
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Cohen, earlier this month, was officially tasked with leading GameStop’s e-commerce push. He was named chairman of a special committee that will identify initiatives to speed up the transformation.
GameStop on Tuesday announced the departure of Chief Customer Officer Frank Hamlin. His exit comes about two weeks after the company announced Chief Financial Officer Jim Bell would resign effective March 26.
Changes have been in the works for weeks with the company in February naming Matt Francis, a former engineering leader at Amazon Web Services, as its first chief technology officer.
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Investors will be paying close attention to how the company’s e-commerce push is progressing amid declining sales at its physical store locations.
GameStop said online sales soared 309% during the crucial nine-week holiday season ended Jan. 2. However, total sales fell 3.1% year over year to $1.77 billion as strong console demand was offset by physical store closures due to COVID-19 and supply-chain constraints.
GameStop is expected to report fourth-quarter earnings of $1.35 per share on revenue of $2.23 billion. The company earned $1.27 per share on sales of $2.19 billion in the year-ago quarter.