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GameStop shares jump as eBay stake boosts expected Q2 profit
GameStop expects second-quarter net income of $290.0 million to $310.0 million, helped by about $238.0 million in gains from converting its eBay derivative into shares.
GameStop shares rose about 5% in early trading on Monday after the company released preliminary second-quarter results, pointing to higher profit in part due to its stake in eBay.
According to Yahoo Finance, GameStop expects net income of $290.0 million to $310.0 million for the quarter ending Aug. 1, compared with $168.6 million in the prior year’s second quarter. The company said it converted its eBay derivative position into eBay shares, generating about $238.0 million in gains, and it owns 43.4 million shares of eBay common stock valued at more than $4.9 billion.
Yahoo Finance also reports that the eBay stake is expected to offset declines elsewhere, with GameStop expecting revenue of $780.0 million to $800.0 million for the quarter, down from $972.2 million last year. The company plans to release its full second-quarter results on Sept. 8.
The preliminary figures were issued in connection with an amendment to GameStop’s private exchange of $1.4 billion in convertible notes, Yahoo Finance added. The stock is down 11% year to date, after an earlier unsolicited $56 billion bid to buy eBay was rejected.