GameStop Sales Beat Estimates With Shift to Crypto and NFTs
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(Bloomberg) — GameStop Corp. reported mixed results in the first quarter as the gaming retailer shifts to cryptocurrencies and nonfungible tokens.
Net sales rose 8% to $1.38 billion in the three months ended April 30, the company reported in a statement on Wednesday, better than the $1.33 billion analysts estimated. But the company also reported its net loss more than doubled to $157.9 million. The adjusted loss of $2.08 per share, missed analysts’ average estimate for a loss of $1.16, according to data compiled by Bloomberg. Shares initially rose as much as 9% in extended trading before giving up those gains.
Ryan Cohen, who joined the board and became chairman last year, has been trying to revive growth at beleaguered GameStop, which has slowed as gamers shifted from buying game discs to digital downloads. The company became the poster child for so-called meme stocks, seeing volatile swings in the stock price over the last year that have little to do with its business fundamentals.
Cohen hasn’t said much publicly about his plans to push GameStop into the volatile world of cryptocurrencies, but earlier this month the company launched a digital asset wallet that will allow gamers to store, send and receive cryptocurrencies and NFTs without leaving their web browser. The wallet will be used in GameStop’s new NFT marketplace, expected to launch in the current quarter.
Analysts aren’t fully convinced that the company, which has struggled to transition from a brick-and-mortar game retail store, will become a leader in the NFT market. The recent selloff in cryptocurrencies hasn’t helped the picture for GameStop’s new initiatives.