In this photo illustration, a Gamestop logo is displayed on a smartphone screen with the Gamestop Twitter page in the background. (Photo Illustration by Avishek Das/SOPA Images/LightRocket via Getty Images)
Meme stocks are rising before the opening bell Wednesday after GameStop, one of the most heavily traded off-brand stocks during the pandemic, posted a surprise profit for the fourth quarter.
Rather than a per-share loss of 16 cents as Wall Street had expected, the video game retailer reported a profit of 16 cents per share, or $48.2 million in all.
GameStop's revenue fell and much of the profit gain came from aggressive cost cutting, including store closures and layoffs. However, as was the case during the pandemic, fundamentals that typically drive stock movement appear to be being pushed aside.
Shares of GameStop Corp., Grapevine, Texas, surged 52% in premarket trading and it pulled other meme stocks along for the ride.
During the pandemic, GameStop was a member of a group of beat-down stocks that drew smaller investors in huge numbers. The theory was that if enough small investors got in the game and drove the stock higher, it would force large hedge funds with short positions (bets that the stock would fall), to capitulate and sell those positions at a massive loss.
It worked. GameStop’s stock ran from 65 cents in April 2020, near the start of the pandemic, to more than $120 by January 2021. Similar tactics drove the stock of struggling movie chain AMC 15 times higher during the same period, and that dynamic appears to be driving the stocks of GameStop, AMC, and other so-called meme stocks in early trading Wednesday.
Citron Research, Melvin Capital and other big hedge funds lost an estimated $5 billion on the other side of the trade in 2021, according to analytics firm S3 Partners last week.
Shares of AMC Entertainment Holdings Inc. jumped 9%. Bed Bath & Beyond Inc.’s stock climbed more than 11% and Carvana rose 20%. Palantir, Virgin Galactic and Nokia, also considered meme stocks, rose as well.
GameStop CEO Matthew Furlong said during a post-earnings conference call late Tuesday that inflation, rising interest rates and material macro headwinds forced cost cuts, and those efforts will continue this year.
"We’re going to aggressively pursue further cost containment, efficiency, profitability and pragmatic growth in the categories where we can consistently delight our customers, Furlong said.
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A Michigan judge is putting sponges in the hands of shoplifters and ordering them to wash cars in a Walmart parking lot when spring weather arrives. Genesee County Judge Jeffrey Clothier hopes the unusual form of community service discourages people from stealing from Walmart. The judge also wants to reward shoppers with free car washes. Clothier says he began ordering “Walmart wash” sentences this week for shoplifting at the store in Grand Blanc Township. He believes 75 to 100 people eventually will be ordered to wash cars this spring. Clothier says he will be washing cars alongside them when the time comes.
The State Department had been in talks with Elon Musk’s Tesla company to buy armored electric vehicles, but the plans have been put on hold by the Trump administration after reports emerged about a potential $400 million purchase. A State Department spokesperson said the electric car company owned by Musk was the only one that expressed interest back in May 2024. The deal with Tesla was only in its planning phases but it was forecast to be the largest contract of the year. It shows how some of his wealth has come and was still expected to come from taxpayers.
At 100 years old, the Goodyear Blimp is an ageless star in the sky. The 246-foot-long airship will be in the background of the Daytona 500 — flying roughly 1,500 feet above Daytona International Speedway, actually — to celebrate its greatest anniversary tour. Even though remote camera technologies are improving regularly and changing the landscape of aerial footage, the blimp continues to carve out a niche. At Daytona, with the usual 40-car field racing around a 2½-mile superspeedway, views from the blimp aptly provide the scope of the event.
You'll just have to wait for interest rates (and prices) to go down. Plus, this deal's a steel, the big carmaker wedding is off, and bribery is back, baby!
