) jumped nearly 40% in premarket trading on Wednesday after the video game retailer posted its first profitable quarter in two years, igniting a surge in other stocks popular among retail traders.
GameStop posted an adjusted profit of 16 cents per share for the fourth quarter, compared to a loss of 47 cents a year ago, helped by a tight lid on costs including job cuts. The Grapevine, Texas-based company, in which billionaire investor Ryan Cohen serves as chairman and majority shareholder, recorded a 16% decline in costs during the quarter.“The early signs on costs are encouraging, and expect profitability again in Q4 2023, but want to see the leverage in the non-holiday quarters before modeling full-year positive EBITDA,” said Jefferies analyst Andrew Uerkwitz.
The high interest rate regime of the past year has roiled stock markets, with speculative areas of the market such as meme stocks taking a severe blow. GameStop shares slid 25% in the past 12 months, compared to a 10.3% slide in the S&P 500. Be smart with your money. Get the latest investing insights delivered right to your inbox three times a week, with the Globe Investor newsletter.