GameStop (GME) continues to be a company worth watching, especially as it breaks into new territory and receives support from individual investors. While no acquisitions were mentioned, today’s earnings call did offer listeners an insight into the company’s willingness to make acquisitions should they prove to be a complementary asset and in the right price range.
During the GameStop Q3 2023 earnings call, GameStop CEO Matt Furlong spoke to the company’s openness to explore acquisitions. “If a strategic asset or complementary business becomes available in the right price range, we want to be able to explore those acquisitions,” Furlong said.
Part of being able to explore said acquisitions comes down to maintaining a sizeable cash position. Furlong noted this stating the company’s strong cash positions as one of its benefits heading into 2023. While GameStop has decreased its cash on hand by $97.5 million this last quarter, it finished Q3 with $1.042 billion in “cash, cash equivalents, and marketable securities”.
You can read the full quote from Matt Furlong below:
Looking ahead, we have two overarching priorities: achieving profitability in the near term and driving pragmatic growth over the long term.
Now that the necessary investments have been made and we have identified the aforementioned opportunity set, we’re going to be very judicious with respect to how we allocate capital to the core business.
Maintaining a sizeable cash position will maximise our optionality and keep us strong against a challenging economic backdrop. If a strategic asset or complementary business becomes available in the right price range, we want to be able to explore those acquisitions.
As a result of these steps and our planning, we believe GameStop is well-positioned heading into 2023.
We stand to benefit from our strong cash position, lack of debt, healthy inventory mix, shrinking cost structure, and disciplined focus on categories where we have competitive positioning.
Though brief, there was a lot of ground to cover in the earnings call and the reports that were released. GameStop mentioned its Wallet and NFT marketplaces, though revenues were “not material” to the Q3 results. The company also missed its earnings and revenue expectations for Q3 2022. Despite this, Furlong seems confident of the company’s trajectory leading into 2023.