By
Chimamanda U. Martha
January 18th, 2024
GameStop seeks to increase its e-commerce sales away from physical stores in the coming quarters.
The stock of American video game retailer GameStop Corp (NYSE: GME) closed yesterday trading at $31.40, up 57.39%. Meanwhile, the surge had continued during Thursday’s pre-market as GameStop stock was up approximately 16.27% to trade around $36.51 at the time of writing.
The spike is attributed to several positive aspects that the company has announced in the past few days. First, GameStop announced on Monday that its sales rose by 4.8%, on a comparable-store basis for the nine weeks through January, 2. Secondly, the company also revealed that the spike in sales was significantly bolstered by a 309% jump in e-commerce revenue.
Forward, the company anticipates a spike in demand for its products as the new Sony PlayStation and Microsoft Xbox take the market by storm during the pandemic.
Besides the market performance, GameStop announced that it has added three new e-commerce directors with notable experience. Apparently, the three new directors including Ryan Cohen, founder of RC Ventures and the online pet food supplier Chewy, were included as part of an agreement with one of its largest shareholders, RC Ventures.
GameStop Performance that Boosts GME Stock
GameStop seeks to increase its e-commerce sales away from physical stores in the coming quarters. Particularly due to the fact that most of its stores remain closed in the effect of coronavirus pandemic.
The inclusion of new directors with e-commerce experience is expected to drive its sales higher especially now that more people are locked in their homes.
GameStop experienced one of its best years last year despite the closure of its physical stores. Market data provided by MarketWatch indicates GME stock rallied approximately 581% last year. Further, GameStop shares are up approximately 156.33% and 126.72% in the past three months and one month respectively.
Having been rated 8 times by credible Wall Street analysts, GameStop stock received an average of a Hold rating. As a result of the recent spike, the company has a reported market valuation of approximately $1.39 billion and 69.75 million outstanding shares.
Metrics provided by FactSet indicates short interest last month reached 138% of shares outstanding. Notably, the short-sellers are popularly known for borrowing company shares in a bid to sell them later with the hopes of buying them back at a lower price in the future.
GameStop has diversified its business into other ventures including a video game magazine and also owns a Game Informer. The company is betting that a possible coronavirus vaccine will not immediately revamp the economy thus the demand for its products will remain high.
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