GameStop (GME) shares drop after-hours as the video game retailer reported mixed results for its first quarter

GameStop Corp (GME) shares dropped after-hours on Tuesday as the video game retailer reported mixed results for its first quarter, showing significant operational improvements

GameStop Corp (NYSE:GME) shares dropped after-hours on Tuesday as the video game retailer reported mixed results for its first quarter, showing significant operational improvements amid a decline in revenue.

The new Bitcoin (BTC) buying firm’s earnings for its Q1 period ending May 3 saw revenues of $732.4 million, lower than analyst estimates of $754.2 million and a 17% decline compared to its $881.8 million revenues at the same time last year, which IG attributed to ongoing challenges in physical game sales.

However, GameStop reported a net income of $44.8 million, up from a net loss of $32.3 million for the prior year’s first quarter. Operating losses also improved and were $10.8 million for the period, compared to an operating loss of $50.6 million in the first quarter of 2024.

GME slides after-hours on revenue miss

GameStop shares dropped by over 3.5% in after-hours trading on Tuesday, falling to just above $29, according to Google Finance.

The company’s stock price has been relatively flat over the past month, but is down around 3.8% year-to-date, falling slightly after it purchased Bitcoin for the first time in May.

GME hit an all-time high of just over $80 in January 2021, just after the previous crypto market bull cycle peak, and during the Reddit group WallStreetBets’ stock buying frenzy.

Lots of available cash

GameStop reported it had $6.4 billion in cash, cash equivalents, and marketable securities, which has grown from $1 billion a year ago, which could enable the firm to make more Bitcoin purchases.

The company is also planning to apply for an equity grant program to retain and motivate key employees.

It also announced it would be shutting down its remaining two physical stores in China later this year, as part of its ongoing efforts to streamline operations and focus on its core markets.

GameStop also said it had no plans to sell any of its Bitcoin holdings despite a recent price downturn, and that it remained committed to exploring new technologies and investment opportunities.

As of Monday’s close, GameStop shares had dropped by 3.8% for the year, while in after-hours trading they fell a further 3.5%.