GameStop stock price: GME shares spike nearly 10% after FTX crypto partnership announced

Meme stock icon GameStop has announced its second-quarter 2022 results—and things aren’t looking great. As CNBC notes, the company’s Q2 saw sales decline to $1.14 billion and losses growing to $108.7 million. Those losses are up from $61.6 million in the same quarter a year earlier.

Despite this, GameStop stock (ticker: GME) is up nearly 10% in pre-market trading. So what gives? Here’s what you need to know:

What’s happened? GameStop announced its Q2 2022 results and they were disappointing. Sales declined and losses were up. Yet despite the disappointing results, GME stock is up almost 10% in pre-market trading today.
If things were bad, why is GME stock up? Eh, with a meme stock, there is usually no definitive answer to why it rises. But GameStop did announce some news which probably gives investors hope. First, it announced a deal with crypto exchange FTX. Second, GameStop announced it will invest in its faltering stores.
What’s with the FTX deal? FTX is a crypto exchange where people can buy and sell cryptocurrencies and NFTs. GameStop says it will be FTX’s “preferred retail partner in the United States.”
What does the partnership involve? That’s actually pretty vague. In a press release, GameStop says it is “collaborating with FTX on new ecommerce and online marketing initiatives.” Oh, and it will also carry FTX gift cards in certain stores.
Does the GameStop/FTX partnership make sense? Sure. People who invest in meme stocks are also likely to invest in crypto. And GameStop has its fingers in various crypto products already as it seeks to remake itself for a new era. So the FTX partnership is understandable.
What about GameStop’s retail store plan? GameStop says its stores play an important role in the way in which its customers interact with the company, so it wants to maximize store sales. To that end, GameStop has rolled out new incentives for store leadership. Store leaders can now get $21,000 in GME stock, which vests over three years. And if the store performs well, the leaders can get even more GME stock.
What does GameStock say about its poor Q2 performance? On its earning call, GameStop CEO Matt Furlong said, “Our path to becoming a more diversified and tech-centric business is one that obviously carries risk and will take time. This said, we believe GameStop is a much stronger business than it was 18 months ago.”