The deal has led to a slight increase in GameStop stock price. Yesterday, GameStop shares ended the session 4.38% down, at $24.04. But following the announcement, the stock price rose about 10% in after hours trading.
Video games and entertainment software retailer GameStop Corp (NYSE: GME) has announced a strategic partnership with crypto exchange FTX.US. Within the deal, the companies will collaboratively work on new e-commerce and online marketing initiatives. In particular, GameStop will serve as FTX’s preferred retail partner in the United States, with GameStop customers getting access to FTX gift cards in select stores. Meanwhile, FTX is expecting to attract GameStop users to the crypto world and welcome them to its ecosystem.
Gamestop and FTX.US
Recently, FTX.US introduced a stock trading service to all US users, including non-crypto investors. The moves aimed at expanding the exchange’s customer base and increasing its assets under custody.
Meanwhile, for GameStop, the partnership is another shift in its strategy that the company has been changing several times lately. For years, GameStop has been focusing on bringing innovation to video games. But in 2021, the company decided to move beyond games and invest in technology. Besides, GameStop said it would leverage its digital assets, modernize its fulfillment operations, and diversify its product offerings to include PC gaming, computers, monitors, game tables, mobile gaming products, and gaming TVs.
The company has been struggling this year, even though it split its stock earlier to lower the share price, which in theory should have led to more demand for GME shares as they would be more affordable for individual investors. Instead, GME stock is 35% down this year so far.
The deal has led to a slight increase in GameStop’s stock price. Yesterday, GameStop shares ended the session 4.38% down, at $24.04. But following the announcement, the stock price rose about 10% in after-hours trading. In the pre-market today, GME shares are trading 9.93% higher, at $26.23. GME market cap has totaled $7.66 billion.
GameStop’s Results in Q2 2022
As we have mentioned earlier, GameStop has been facing financial challenges this year, with its sales declining and losses increasing. For the second quarter that ended on July 30, the company’s sales dropped to $1.14 billion from the $1.18 billion it reported for the same period last year. GameStop’s losses increased to $108.7 million, or 36 cents per share. For comparison, a year prior, the loss totaled $61.6 million, or 21 cents.
Selling, general and administrative expenses were $387.5 million for the quarter, which represented a sequential decline of 14.3% from Q1 2022. It reflected the company’s focus on right-sizing costs following a period of significant investment in long-term initiatives.
With a general downturn in sales, the sales attributable to collectibles were quite high. They made up $223.2 million for the quarter, compared to $177.2 million in the last year’s second quarter.
In August, we also reported that GameStop NFT revenue dropped to less than $4000 after the platform’s trading volume reached an average of $166,000 within 24 hours.
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