Video game resale retailer GameStop (GME) has seemed like its been drowning for some time now as video game fans have moved mostly to buying digital products, leaving the chain desperate for a solution to remain relevant.
However, it may have just found its life preserver. GameStop reported its fourth-quarter results on March 21, 2023, and the company's net income of $48.2 million delivered a shock to the market. This turnaround comes after successive quarters of net loss.
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In response to the surprising news, share prices climbed by more than 50% at one point.
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CEO Matt Furlong has spent a year improving the company’s bottom line with staff reductions and paused investments. According to Furlong, the future of GameStop looks bright. He and the company are "now focused on achieving profitability, launching proprietary products, leveraging our brand in new ways, and investing in our stores,” according to a company-wide memo sent in August 2022.
Named a meme stock in 2021 after Redditors propelled it to fame, GameStop has since garnered a loyal following of DIY investors -- many of whom are celebrating on the now-infamous Reddit channels r/WallStreetBets and r/GME.
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Across social media platforms, investors started to sound off. Some are even comparing the stock's success to that of the mega money-making company Amazon (AMZN).
Other tweets and posts display the kind of fervency you'd expect from devoted sports fans, with one central sentiment: buy and hold.
Maybe GameStop has more extra lives than we thought.
