Despite what’s been a pretty quiet month for the gaming retailer, GameStop (NYSE: GME) always finds a way to pop back into the limelight for some reason. With most of the financial media’s attention focused on crypto-related news, such as Coinbase’s public listing, GameStop managed to shoot up on Wednesday and become one of the biggest winners on the trading day. There’s a couple of big reasons why this happened.
The first piece of news for GameStop is that it announced it would be repurchasing over $200 million in additional funding. The company’s most recent financial figures were less than impressive, disappointing many Wall Street analysts that had gotten their hopes up. GameStop is still burning through cash at an alarming rate, but settling its ongoing obligations is also a good thing for the company to take care of before it snowballs out of control.
Therefore, the gaming retailer is hoping that it could strengthen its balance sheet by buying back some of its existing bonds so it doesn’t need to pay extra in interest payments. It might not be the biggest catalyst, but it’s still a good piece of news for the company.
The other development has to do with the crypto market. GameStop recently listed a job posting that it was looking for a cryptocurrency/blockchain security analyst, preferably one that also had experience in the explosive non-fungible token (NFT) market. Considering that most NFT stocks have skyrocketed after making an NFT-related announcement, an official press release from GameStop announcing an NFT project of some kind could send the stock soaring once again. However, that’s still just a rumor at this point.
Couple that with the fact that Coinbase just listed, it’s not surprising that a cryptocurrency-related development from GameStop could send its stock soaring. While traders on platforms like Reddit have dialed down their enthusiasm for the gaming retailer, it is still possible to see a lot of volatility from this company going forward.
Shares of GameStop were up around 18.5% over the course of Wednesday, making it one of the biggest moving stocks for the day. Currently, prices are sitting at around $165 per share, a far cry from the $350 record-high reported back in late January. Most Wall Street analysts covering the stock still think the company is grossly overvalued, even if it manages to successfully make the transition from a brick-and-mortar-based company to an online gaming retailer.
GameStop Company Profile
GameStop Corp is a U.S. multichannel video game, consumer electronics, and services retailer. The company operates across Europe, Canada, Australia, and the United States. GameStop sells new and second-hand video game hardware, physical and digital video game software, and video game accessories, mainly through GameStop, EB Games, and Micromania stores and international e-commerce sites, including www.gamestop.com, www.ebgames.com.au, and www.micromania.fr. The company has two main business segments: Video game brands and Technology brands. The technology brands segment sells wireless products and services and operates Spring Mobile managed AT&T and Cricket Wireless branded stores, along with the Simply Mac business. – Warrior Trading News
