GameStop Corp (GME) shares declined in after-hours trading on Tuesday after the company posted mixed first-quarter results, highlighting improved operations but a drop in revenue.
The video game retailer, which recently ventured into Bitcoin (BTC) investments, reported Q1 revenue of $732.4 million for the period ending May 3—falling short of analyst expectations of $754.2 million and marking a 17% decrease from $881.8 million in the same quarter last year. According to IG, the decline was largely driven by continued weakness in physical game sales.
Despite the revenue miss, GameStop reported a net income of $44.8 million, a notable turnaround from the $32.3 million net loss in Q1 last year. Operating losses also narrowed significantly to $10.8 million, down from $50.6 million a year earlier.
GameStop (GME) Slips After-Hours Following Revenue Miss
GameStop shares fell more than 3.5% in after-hours trading on Tuesday, dipping to just above $29, according to Google Finance.
While the stock has remained mostly flat over the past month, it is down approximately 3.8% year-to-date, edging lower after the company made its first Bitcoin purchase in May.
GameStop (GME) reached an all-time high of just over $80 in January 2021, following the peak of the previous crypto bull market and amid the stock-buying frenzy driven by the Reddit group WallStreetBets.
Ample Cash Reserves
GameStop reported holding $6.4 billion in cash, cash equivalents, and marketable securities—up significantly from $1 billion a year ago—potentially positioning the company to expand its Bitcoin purchases.
While GameStop has stated its intention to adopt Bitcoin as a reserve asset, it has not disclosed a target amount and noted it may sell its holdings if circumstances require.
Bitcoin Purchases Initiated in May
On May 28, GameStop became one of the latest public companies to invest in Bitcoin, announcing its initial purchase of 4,710 BTC—valued at approximately $513 million at the time.
To finance the acquisition, the company turned to debt funding, launching a $1.3 billion convertible notes offering alongside the announcement.
