GameStop is now a profitable company
Market News Daily: GameStop is now a profitable company, should you buy it?

GameStop (NYSE:GME) is now a profitable company.

The company posted a quarterly profit for the first time in two years.

Shares soared up to 50% on Tuesday and up to 40% on Wednesday as we saw big buying volume coming in.

For the quarter ended Jan. 28, net sales dropped slightly to $2.23 billion from $2.25 billion in last year’s fourth quarter.

GameStop also posted a profit of $48.2 million, or 16 cents a share, compared to a loss of $147.5 million, or 49 cents, a year ago.

Since the ‘meme stock’ frenzy, we know GameStop has been working on cutting costs significantly which actually helped the company gain profitability.

Selling, general and administrative expenses came in at $453.4 million for the quarter, or 20.4% of sales, compared to $538.9 million, or 23.9% of sales, in the year-earlier period.

CEO Matt Furlong said on an investor call the company is going into 2023 with further plans to cut excess costs including in European markets, where it has already exited and begun to pull out of some countries.

He said that GameStop is also considering bolstering its business with higher margin categories such as toys.

“GameStop is a much healthier business today than it was at the start of 2021,” he said.

Is the GameStop Short Thesis Dead?

GameStop remains heavily shorted with a high short interest of 24.08%.

This means short sellers are still holding on to their short positions.

The company is no longer in danger of bankruptcy and has now posted profits after two years.

Will short sellers finally close their positions?

The effects would certainly trigger another short squeeze like we saw in January of 2021.

But experts still believe the markets haven’t seen a bottom which means we’re likely to see continued shorting in GameStop until the economy as an entirety begins to shift again.

The GameStop short thesis may be dead, but short sellers have not entirely left yet.

Though it is important to note that short sellers have lost $610 million in GameStop since the start of the week.

If GME stock continues to rise, it might put enough pressure on short sellers to just call it quits, sending this rocket back to the moon.

Is GameStop a Buy In 2023?

GameStop is now a profitable company in 2023, putting the company out of great risk from bankruptcy.

Its shareholder base continues to hold the company stock in an effort to squeeze short sellers from their positions once again.

Is it worth investing money you can afford to lose in GameStop right now?


The company has for the most part eliminated the short thesis with its profitability and short sellers are now stuck holding significant losses.

Rising share prices like we saw in January of 2021 is all the stock needs to squeeze short sellers from their positions.

While many people made money from GameStop during the ‘meme stock’ frenzy, many incurred heavy losses too.

If we see history repeat itself in 2023, be sure to have a plan.

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Market News Today – GameStop is now a profitable company, should you buy it?

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