As the video game retailer declared its first quarterly profit in two years, shares of GameStop, a meme stock promoted on Reddit’s WallStreetBets community, jumped around 40% in premarket activity on Wednesday.
Despite a 1.2% decline in revenue to $2.23 billion, the firm posted a profit of $48.2 million in the fourth quarter of 2022, reversing a loss of $147.5 million in the same time a year prior.
“GameStop is a lot better business now than it was at the beginning of 2021,” said GameStop CEO Matt Furlong on Tuesday’s earnings call.
Meme stock After making a surprise profit for the first time in two years
In premarket trading, GameStop shares increased 40.8% to $24.86 a share, after completing Tuesday’s session 4.6% higher. In after-hours trading, they rose by over 50 percent.
In 2022, GameStop returned to profitability by decreasing expenses and streamlining inventories, according to Furlong. This includes lowering the number of employees and simplifying processes.
The corporation is likely to continue to minimize unnecessary expenses in 2023, including closing down operations in various areas in Europe, according Furlong. It also seeks to expand its industries with better margins, such as collectibles and toys.
Even more, Furlong stated that GameStop has “a road to annual profitability.”
The WallStreetBets subreddit was used by ordinary investors in 2021 to find and pump so-called meme stocks, such as GameStop.
During a two-week period in January 2021, GameStop’s share price increased by approximately one thousand percent as a result of forum conversation.
Since then, GameStop share prices have declined but remain volatile. This year, shares are down 4.4% so far.
Network Hype Team