Shares of GameStop Corp. experienced a 4.1% increase on Monday in anticipation of the company’s upcoming third-quarter results, which are scheduled to be released later this week. The stock is currently on track to achieve a two-day winning streak.
GameStop (GME) is preparing to unveil their third-quarter results after the closing bell on Wednesday. Following the announcement of the date for its earnings report, the video game retailer witnessed a rally resembling internet memes, resulting in an impressive surge. Last week, the stock achieved its most substantial two-day gain in eight months and ultimately concluded Friday’s session with a 5.2% increase.
While GameStop shares have experienced a decrease of 13.8% in 2023, in comparison to the S&P 500 index’s gain of 18.5%, this recent surge has rejuvenated investor confidence.
Related: GameStop Anticipates Continued Surge Leading Up to Earnings Announcement
Analysts surveyed by FactSet predict that GameStop will report an adjusted loss of 8 cents per share for the third quarter, in contrast to a loss of 31 cents per share during the same period last year. Additionally, these analysts anticipate that the video game retailer will report fiscal-third-quarter revenue of $1.182 billion, indicating a slight decrease from $1.186 billion during the corresponding period last year.
When GameStop reported its second-quarter results in early September, it surpassed expectations. The boost in performance was attributed to strong international sales and the successful launch of a significant software release. As the company heads towards its third-quarter results, it is also intensifying its efforts to enhance cost control measures.
Major Leadership Changes at GameStop
GameStop has recently experienced significant shifts in its leadership. In June, CEO Matthew Furlong was dismissed, and the company’s board subsequently selected activist investor Ryan Cohen as the new executive chair. Later on, Cohen’s role was further elevated when he was appointed CEO in late September, marking another step in his ongoing efforts to revitalize the company.
Challenging Prospects Ahead
Despite Cohen taking the helm, Wedbush analyst Michael Pachter remains cautious about GameStop’s future. Pachter predicts that the company will continue to face a decline in physical game sales and reduced store traffic, as he mentioned in his September statement.
Cohen’s Influence on GameStop
In August 2020, news broke that Cohen had acquired a 9% stake in GameStop, triggering a surge in the company’s stock. Recognizing the need for change, the activist investor promptly began advocating for a transformation centered around digital sales. This dedication led to his appointment on the company’s board in January 2021. Finally, in June of 2021, Cohen solidified his influence by assuming the role of company chair.
Interactions on Social Media
Occasionally, Cohen takes to social media platforms to share his thoughts. Just recently, he tweeted a quote from former world heavyweight champion Mike Tyson about pigeons. Cohen’s social media presence always garners attention, and this particular tweet has already been viewed over 312,000 times on Twitter.
GameStop has not yet responded to requests for comment regarding this story.
