GameStop (NYSE: GME) reported a loss during its latest quarter in spite of a rise in sales. A surprise to investors that were expecting the retailer to turn a profit. The company’s stock fell over 8% during after-hours trading on March 17.
The American video game retailer reported an earnings loss of USD1.86 per share, compared to the expected USD0.84 a share. Revenue amounted to USD2.25 Billion, slightly higher than analysts anticipated USD2.24 Billion.
According to David Trainer, CEO of investment research firm New Constructs, despite GME’s decline, it “remains a dangerous stock.” This statement comes due to the fact that GameStop, similar to other mem stocks, “remain dangerously overvalued and don’t generate anywhere near the profits necessary to justify their current valuations.”
Furthermore, the company is set to launch its marketplace for non-fungible tokens (“NFTs”) by the end of its 2022 second quarter. GameStop partnered with Immutable X in January with the intention to build out the NFT marketplace.
“As we scale and expand our core offerings we will simultaneously invest in additional growth, including blockchain, digital assets (including non-fungible tokens (“NFTs”)), Web 3.0 technology, and new destination formats for our stores,” said the filing.