GameStop shares experienced a decline following the release of their fiscal third-quarter revenue report, which fell short of expectations. However, amidst this setback, the company revealed its potential plans to utilize its cash reserves for investments in stocks.
For the quarter that ended in October, GameStop reported an adjusted loss of 1 cent per share, which was better than the anticipated loss of 8 cents per share according to analysts polled by FactSet. Nonetheless, the company’s sales of $1.078 billion fell short of the projected $1.18 billion.
Within the same quarter, GameStop saw a decrease in hardware and accessories sales, dropping from $627 million to $579 million compared to the previous year. Software sales also declined from $352 million to $321 million.
As a result of this disappointing report, GameStop’s stock fell by 8% to $13.65 during premarket trading on Thursday. This decline adds to the challenges faced by the meme stock this year, as it has already seen a 20% decrease.
In their 10Q filing with the SEC, GameStop disclosed that they traditionally invested their excess cash in U.S. government-related securities and deposits. However, on December 5th, the company’s board of directors approved a new investment policy that opens the door for GameStop to invest in stocks and other forms of investments.
Further details regarding this new investment policy were not immediately available as GameStop did not provide a comment upon request.
At the end of the October quarter, GameStop had approximately $1.2 billion in cash and marketable securities.