GameStop’s New Play: Trading Cards and a Partnership with PSA
GameStop Corp. (GME) shares are on the move today following the announcement of a strategic collaboration with Professional Sports Authenticator (PSA). The partnership, which sees GameStop become an authorized PSA dealer, aims to boost the retailer’s trading card business.
PSA, a subsidiary of Collectors Holdings, is a well-respected name in the trading card world, offering authentication and grading services for cards and autographs. This collaboration will allow GameStop to offer PSA grading services in select stores across the United States, expanding its existing trading card offerings.
This move comes as GameStop continues to search for new avenues to diversify its revenue streams. The company has faced challenges in recent years as the video game industry has shifted increasingly towards digital platforms. GameStop’s sales have fallen short of estimates for four consecutive quarters, with the most recent quarter showing continued declines and missing analyst expectations.
However, the company reported a surprising profit of 1 cent per share for the quarter, defying estimates of a 9-cent loss. GameStop’s financial position also remains strong, with $4.2 billion in cash, cash equivalents, and marketable securities. This financial strength comes from the company’s recent capital raising efforts, including a recent at-the-market equity offering that generated approximately $400 million in gross proceeds.
While GameStop continues to navigate its way through the evolving video game landscape, its efforts to diversify its business and tap into the growing trading card market show that it is actively seeking new avenues for growth. Investors will be watching to see if this latest move can help turn the tide for the struggling retailer.
GME Stock Performance
GameStop shares initially jumped about 1% on the news of the PSA collaboration before retracing some of those gains. At the time of writing, the stock was trading roughly flat around $21.13.
Looking Ahead
GameStop is expected to report its next earnings results in December. Analysts are forecasting a loss of 3 cents per share and revenue of $887.7 million. In the comparable quarter last year, GameStop reported breakeven earnings on revenue of $1.18 billion.
The trading card market is booming, and GameStop’s partnership with PSA could be a significant step in its journey to find new revenue streams. It remains to be seen whether this strategy will be enough to turn around the company’s fortunes, but it is a promising development for GameStop and a sign that the retailer is actively trying to reinvent itself.