GME Stock Has Been Consolidating Between $20.2 And $26.9 This Year – Here’s What Retail Expects After Q1 Earnings Beat, Buyback

• Investors highlighted the company’s sizeable cash in hand as a key strength going forward; the company ended the first quarter with $9.7 billion in cash, cash equivalents, and marketable securities.
• GameStop reported a revenue of $835.3 million, well above Wall Street’s forecast of $766.64 million, according to Fiscal.ai data.
• The video game retailer announced a $2 billion share repurchase program, which will run through June 2029.

Shares of GameStop Corp. (GME), which had been recently hovering around 4-month lows, surged 10% in pre-market trading on Wednesday, as stronger-than-expected first-quarter results and a newly announced $2 billion share buyback reignited investor enthusiasm for the meme-stock favorite.

On Tuesday, GameStop reported a revenue of $835.3 million, well above Wall Street’s forecast of $766.64 million, according to Fiscal.ai data. Its adjusted earnings of $0.30 per share in the first quarter (Q1) were nearly double the consensus estimates of $0.16 per share.

Simultaneously, the video game retailer announced a $2 billion share repurchase program, which will run through June 2029 and replace the company’s existing repurchase program. The company ended the first quarter with $9.7 billion in cash, cash equivalents, marketable securities, digital assets, related receivables, and collateral pledged for derivative assets.

Retail Investors Have High Expectations From GME

Retail sentiment surrounding GME flipped to ‘bullish’ from ‘bearish’ a day earlier, while message volumes surged 180% over a 24-hour period. GME was also among the top trending tickers on the platform.

After spending much of the year rangebound between roughly $20.2 and $26.9, the stock is now drawing renewed investor optimism that the latest earnings beat and buyback could spark a breakout.

One user argued that the stock could rally to $40 following the latest announcements, citing the company’s sizable cash reserves as a key strength.

Another user said the buyback should result in the stock’s price rising above $32.

GME’s eBay Buyout Offer

The results come as GameStop continues to pursue its proposed acquisition of eBay after the e-commerce giant rejected its unsolicited $56 billion offer last month. eBay, which is significantly larger than GameStop, dismissed the offer as “neither credible nor attractive.”

A recent filing showed GameStop’s combined direct and derivative exposure to eBay has increased to about 7.78% of outstanding shares, up from 6.55% reported on May 20.

GME shares have shed around 0.6% of their value so far this year.

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