is set to report earnings after market close on Wednesday, as if it mattered to the company’s stock price.
As was the case in March, GameStop’s results are likely to have less of an impact on how the stock is traded. Despite being upstaged by AMC Entertainment
recently, the videogame retailer is still the Mother Meme stock and will continue to move more on what’s being said on Reddit than it will on whether or not Wall Street likes its P&L.
While GameStop is expected to report an earnings per share loss of $0.82 despite a nearly 22% increase in sales for the quarter, and tout the launching of new gaming consoles as an opportunity for growth, it might have already made its biggest news of the day by officially announcing at Wednesday’s shareholder meeting that 35-year-old Chewy co-founder turned private equity investor Ryan Cohen has been voted in as GameStop’s new chairman of the board.
Cohen has become the face of GameStop’s stock surge and a folk hero to the company’s devoted fans on social media who revel in decoding his infrequent cryptic tweets aimed at engaging with the retail investor crowd, but he did not disappoint when he took the reins, announcing to the assembled shareholders “As my dad would say, buckle up.”
“I literally started to get emotional/borderline tears when I heard he said that,” user noyogapants posted on Reddit board Superstonk in response to Cohen’s quote. “Then I took a deep breath and told myself to get it together because it hasn’t even started yet!”
Collecting oneself and wearing a metaphorical seat belt have been good ideas for anyone trading GameStop stock in 2021. Shares are up almost 1,700% year-to-date thanks in large part to retail investors that poured into the stock in January to create one of the most epic and bizarre short squeezes ever. Retail investors have continued to cheer the company’s transformation plan that includes overhauling its leadership and taking concrete steps to move away from brick-and-mortar and towards e-commerce.
Cohen is central to that narrative and has been heralded as a savior that will take the stock “to the moon,” a meme that was a prime driver in the huge buying surge that reignited in late May and now has the company trading over $300 a share for the first time since January.
And GameStop stock has actually fueled Cohen’s plan, with the company completing a $551 million at-the-market equity offering in late April, which it said would be used to pay down its substantial debt and supercharge the transformation.
But while outgoing GamesStop chief executive George Sherman joined Cohen on the board Wednesday morning, his successor has yet to be named and that has created some uncertainty for analysts following the stock. But one of them openly admits that anything concrete to come out of the earnings might be rendered meaningless by retail investors who have made it abundantly clear that they “like the stock.”
“As long as retail investors largely remain enthusiastic about GameStop’s prospects, however,” Wedbush analyst Michael Prachter wrote in a note on Monday, “the major question marks don’t matter much in terms of share price action.”