Today is Thursday, June 2, 2022.
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GameStop’s NFT Hopes
Shares of GameStop (NYSE: GME) ticked up 0.98% in after-hours trading on Wednesday after the gaming merchandise retailer posted mixed earnings.
Financials: GameStop reported a loss of $2.08 per share, which was below estimates. Revenue of $1.38 billion was better than expected.
The Good: Net sales are up year-over-year due to new and expanded brand relationships and the only debt on the books is a low-interest loan.
The Bad: Hardware sales reached $673 million, lower than the same period last year. GameStop did not offer any financial guidance.
New Opportunities: Investors are most excited about GameStop’s opportunities in cryptocurrency and Web3 gaming. This includes a marketplace for non-fungible tokens (NFTs). GameStop announced the marketplace last quarter, with plans to launch it by the end of the second quarter. The Gamestop Wallet, which is a digital asset wallet that can store crypto and NFTs, was announced last month. There have been no other updates about the NFT marketplace.
Stocking Up: Inventory nearly doubled year over year. GameStop stocked up on extra inventory to meet customer demand and offset supply chain headwinds.
Numbers: GameStop’s stock is down 33% in the past six months, but it is up 1% in the past month.
Final Thoughts: The NFT marketplace remains the biggest mystery for this once-popular meme stock, which has been volatile in the past year.
Notable Earnings Today: Lululemon Athletica (Nasdaq: LULU), Crowdstrike Holdings (Nasdaq: CRWD), SpartanNash (Nasdaq: SPTN), Hormel Foods (NYSE: HRL), RH (NYSE: RH), Ciena (NYSE: CIEN), Okta (Nasdaq: OKTA), Toro (NYSE: TTC), Asana (NYSE: ASAN), Designer Brands (NYSE: DBI), Lands' End (Nasdaq: LE), Cooper (NYSE: COO), Duluth Holdings (Nasdaq: DLTH), Tilly's (NYSE: TLYS), Secureworks (Nasdaq; SCWX), Samsara (NYSE: IOT), SIGNA Sports United (NYSE: SSU), Zumiez (Nasdaq: ZUMZ), Calavo Growers (Nasdaq: CVGW).
Notable IPOs Today: ClimateRock Class A Ordinary Shares (Nasdaq: CLRC).
Notable Equity Crowdfunding Campaigns Ending Today: Xairos (Spaced Ventures).
Notable Economic Events Today: Jobless Claims (8:30 a.m. ET), Nonfarm Productivity (8:30 a.m. ET), Unit Labor Costs (8:30 a.m. ET), Factory Orders (10:00 a.m. ET), Crude Oil Inventories (11:00 a.m. ET).
Chewy Posts Unanticipated Profit
Shares of Chewy (NYSE: CHWY) jumped 18.77% in after-hours trading on Wednesday after the online retailer of pet products posted positive earnings.
Financials: Chewy reported earnings of 4 cents per share and revenue of $2.43 billion; both were better than expected.
Headwinds: Despite the profitable performance in the quarter, Chewy expects “the macro and supply chain environment to remain volatile and inflationary pressures to persist throughout the balance of the year.”
Final Thoughts: Chewy’s stock is down 64% in the past six months, but these results show that pet retail is still strong.
How Investors Should Handle Crypto Losses
With cryptocurrency prices dropping in the first half of 2022, should investors continue to HODL (hold on for deal life) or move on by selling their losses?
Data: 40% of Bitcoin holders already have a loss on paper due to the fact that they are not selling, according to Glassnode.
Time Horizon: Perhaps the most important factor in this decision is time horizon, meaning how long investors are willing to wait before cashing out of crypto.
Final Thoughts: There’s nothing wrong with taking a loss or holding - if it fits your overall investing strategy. You may want to consult a financial advisor.
Trends to Watch
Timber: Lumber slumps to seven-month lows as housing market bears brunt of rate hikes (Seeking Alpha)
Injecting Fear: Bitcoin price falls back below $30k after Dimon's economic 'hurricane' warning (KITCO)
Ready for Arrival: United Airlines plans $100 million expansion of pilot training center during hiring spree (CNBC)
More Tech Problems: C3.ai stock plunges 22% after disappointing forecast (MarketWatch)
Cruel Summer: Record Gas Prices Hit Americans’ Start to Summer Travel Season (The Wall Street Journal)
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