GameStop‘s stock price has surged by over 42.95% today, currently sitting at $25.23 at the time of this writing, though it’s still fluctuating quite a bit and continues to rise with each refresh of the page. GameStop was once believed to be on the verge of going completely out of business, but interest in the company was renewed in January 2021 when a “short squeeze” saw the company’s stock balloon to the highest it’s ever been at $483.00.
GameStop responded by pursuing new efforts to turn around its financial misfortune and attempt to make itself profitable again. It seems those efforts have paid off, as GameStop’s latest financial report has seen the company’s stock price spike yet again, even if it’s not nearly as dramatic as the price surge from a couple of years ago.
GameStop’s latest stock price spike is attributed to its Q4 earning results, the first profitable quarter the company has had in years. GameStop reported a profit of $48.2 million the past quarter, compared to the $147.5 million loss it reported last year. Despite GameStop earning a profit this past quarter, though, its sales are actually down. One of the main reasons it was able to turn a profit is due to cost-cutting measures, like firing employees and shutting down some of its retail locations.
GameStop Stock Price Now
GameStop has been shutting down stores in Europe for years, and according to the company, one can expect even more of its stores in the region to be closed in the months and years ahead. GameStop plans to “aggressively cut costs,” which could very well help it rack up more profitable quarters even while its sales are trending down. Of course, GameStop can only shut down so many stores and fire so many employees before it will need to turn things around sales-wise, but it’s unclear if that will be possible.
It’s highly likely that GameStop sales are down because of the industry trending toward digital media. Digital game sales are outpacing physical game sales and there is no sign that will stop any time soon. Interest in new-gen consoles could also help GameStop, especially now that the PS5 and Xbox Series X are more readily available. The new Nintendo console on the horizon may also help a great deal, though all this remains to be seen.
If GameStop is able to combine its aggressive cost-cutting with improving its sales, then the company may very well find a way to hang on as the industry continues shifting toward a digital future. Controversial things like GameStop’s NFT efforts may not be the way to do that, but time will tell.
MORE: The Cheapest Games in GameStop’s Database
Source: CNBC, Yahoo Finance