GameStop's sales fell but profit nearly doubled as eBay investment paid off
The video game retailer posted an estimated $290 million to $310 million in net income, boosted by gains on its eBay stake
On Monday, GameStop (GME) shares experienced a 5% increase during early trading. The company's preliminary results for its second quarter revealed an expected boost in Q2 profit, attributed to its stake in eBay (EBAY). GameStop anticipates net income of $290 million to $310 million for the quarter ending August 1, an improvement from $168.6 million in the same period last year.
The company converted its eBay derivative position into eBay shares, generating approximately $238 million in gains. GameStop owns 43.4 million shares of eBay common stock valued at over $4.9 billion. Despite the positive outlook, revenue for the quarter is expected to decline, with estimates ranging between $780 million to $800 million, down from $972.2 million in the previous year.
The company plans to release its complete second quarter results on September 8. GameStop's announcement came in connection with an amendment to its $1.4 billion convertible note exchange, which was revealed earlier this month. The company's shares have declined by 11% year to date. Earlier this year, GameStop made an unsolicited $56 billion bid to acquire eBay, a proposal that was ultimately rejected by the online marketplace. Ines Ferre, a senior business reporter for Yahoo Finance, provided this report.
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- GameStop stock jumps with eBay investment expected to boost Q2 profit finance.yahoo.com
