GameStop Stock Rises as Earnings Top Estimates, Company Buys Bitcoin

Michael Nagle / Bloomberg / Getty Images Despite today’s rise, shares of Gamestop, perhaps best-known as one of the original meme stocks, have lost a fifth of their value so far this year.

Key Takeaways

GameStop's second-quarter results exceeded analysts' estimates on strong sales of hardware and collectibles. The video game retailer also announced it had purchased 4,710 bitcoin in the quarter, with a value of $528.6 million as of Aug. 2, when the quarter ended. GameStop will distribute a special dividend to shareholders next month in the form of warrants.

GameStop (GME) shares rose after the video game retailer posted better-than-expected results and announced it now held more than half a billion dollars worth of bitcoin.

The company late Tuesday reported second-quarter adjusted earnings per share of $0.25, which was $0.06 more than analysts surveyed by Visible Alpha were looking for. Revenue jumped 22% to $972 million, also above estimates.

GameStop said sales of hardware and accessories increased 31% to $592 million, while collectibles sales soared 63% to $228 million. However, sales of software dropped 27% to $152.5 million.

GameStop also noted that it had purchased 4,710 bitcoin in the quarter, with a value of $528.6 million as of Aug. 2, when the quarter ended.

In addition, the company announced a special dividend distributed to investors in the form of warrants. Shareholders of record on Oct. 3 will receive 1 warrant for every 10 shares they own. GameStop expects to hand out about 59 million warrants on or around Oct. 7.

GameStop shares were up 6% in midday trading. Despite today’s rise, the stock, perhaps best-known as one of the original meme stocks, has lost a fifth of its value so far this year.

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