- GameStop reports unexpected gains in Q4 2022, boosting share price.
- GameStop shares soared nearly 50% in after-hours trading on Tuesday.
- GameStop surged in popularity in 2021 as investors used the WallStreetBets subreddit to pump out so-called memetic stocks.
A stake in video game retailer GameStop WallStreetBets Forum on Redditsurged nearly 50% in after-hours trading Tuesday after the company reported its first quarterly profit in two years.
GameStop reported a profit of $48.2 million in the fourth quarter of 2022, reversing a loss of $147.5 million in the same period last year.
“GameStop today is a much healthier business than it was in early 2021.” GameStop CEO Matt Furlong said on Tuesday’s earnings call:
Furlong said GameStop has returned to profitability in 2022 by cutting costs and optimizing inventory.This includes company downsizing Streamline your operations.
The company is expected to continue cutting extra costs in 2023, which includes curtailing operations in certain European countries. It also aims to boost high-margin businesses such as collectibles and toys.
Furlong even said GameStop has a “pathway to full-year profitability.”
In 2021, GameStop’s popularity skyrocketed as retail investors used the WallStreetBets subreddit to identify and launch so-called memetic stocks.Forum chatter has caused big swings in the stock prices of companies like game stop Movie theater chain AMC.
GameStop shares closed 4.6% higher at $17.65 on Tuesday. They climbed another 48.4% in after-hours trading to $26.20 each.
GameStop’s stock is down 4.4% so far this year.