Video game dealer GameStop partners with Crypto Marketplace FTX

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GameStop Partners With Crypto Marketplace FTX, Reports Smaller Than Expected Loss

GameStop Corp on Wednesday reported a smaller-than-expected quarterly loss and a partnership with FTX US to increase its presence in the cryptocurrency space, pushing the video game retailer’s shares 10 percent higher in expanded trading.

The company will start selling FTX gift cards at some of its stores as part of the partnership, the financial terms of which have not been disclosed.

GameStop launched a digital wallet earlier this year that it said would enable transactions on a marketplace it is building for gamers and others to buy, sell and trade non-exchangeable tokens or NFTs.

“The FTX partnership is unlikely to bring any meaningful revenue or profit, but it sounds good, so that’s positive,” said Wedbush analyst Michael Pachter.

Last year, GameStop was at the center of a social media fueled trading frenzy that sent its stock soaring.

The company has since overhauled its management in an effort to reverse years of languishing sales and has strengthened its e-commerce capabilities as online shopping accelerated during the pandemic.

On an adjusted basis, GameStop lost 35 cents a share in the second quarter, compared to estimates of a loss of 38 cents, according to data from Refinitiv IBES.

During the reported quarter, the company removed Chief Financial Officer Michael Recupero and announced a four-for-one stock split in an effort to revive some of the private interest in its stock.

However, GameStop’s results come at a time when gaming companies are facing a slowdown in video game demand due to pandemic spikes, casting doubt on their ability to weather an economic downturn.

Shares of the company traded higher after the bell at $26.56.

Some investors worried that GameStop chairman Ryan Cohen would sell stock, but since he didn’t, the stock rally reflects investor relief, Mr Pachter said.

(Except for the headline, this story has not been edited by NDTV staff and has been published from a syndicated feed.)



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