GameStop Corp reported a smaller-than-expected quarterly loss and a partnership with FTX US to increase its presence in the cryptocurrency space, sending the video game retailer’s shares up 10% in extended trading.
The company will start selling FTX gift cards at some of its stores as part of the partnership, financial terms of which were not disclosed.
GameStop launched a digital wallet earlier this year that it said would enable transactions in a marketplace it is building for gamers and others to buy, sell and trade non-fungible tokens, or NFTs.
“The FTX partnership is unlikely to yield meaningful revenue or profit, but it sounds good, so that’s a positive,” Wedbush analyst Michael Pachter said.
Last year, GameStop became the center of a social media-fueled trading frenzy. That sent its shares soaring.
The company has since overhauled its management in an effort to reverse years of languishing sales and has been bolstering its e-commerce capabilities as online shopping accelerated during the pandemic.
On an adjusted basis, GameStop lost 35 cents per share in the second quarter, compared with estimates of a loss of 38 cents, according to Refinitiv IBES data.
During the reported quarter, the company removed Chief Financial Officer Michael Recupero and announced a four-for-one stock split in an attempt to revive some of the retail interest in its shares.
However, GameStop’s results come at a time when gaming companies are facing a slowdown in demand for video games from pandemic highs, raising doubts about their ability to weather an economic downturn.
The company’s shares were trading higher at $26.56 after the bell.
Some investors worried that GameStop Chairman Ryan Cohen would sell shares, but since he did not the stock rally reflects investor relief, Pachter said.