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GameStop Stock Jumps On Narrower-Than-Expected Q2 Loss, New FTX Partnership

"In addition to collaborating with FTX on new ecommerce and online marketing initiatives, GameStop will begin carrying FTX gift cards in select stores," the company said.

Updated at 4:25 pm EST

GameStop  (GME) - Get Free Report posted its sixth consecutive quarterly loss Wednesday, with disappointing revenue gains, as the video game retailer continues to focus on its transition into digital asset sales. 

GameStop said its adjusted loss for the three months ending in July was pegged at 35 cents per share, just inside the Street consensus forecast of a 38 cents per share loss but wider than the 19 cents per share loss recorded over the same period last year.

Group revenues, GameStop said, fell 3.7% to $1.136 billion, firmly shy of analysts' forecasts of a $1.266 billion tally. 

GameStop also unveiled a new business partnership with FTX, one of the world's biggest cryptocurrency and derivative exchanges, that will "introduce more GameStop customers to FTX’s community and its marketplaces for digital assets."

GameStop shares were marked 10.6% higher in after-hours trading immediately following the earnings release to indicate a Thursday opening bell price of $26.58, a move that would still leave the stock with a one-month decline of around 38.3%.

GameStop, which is hoping to transition from a reliance on brick-and-mortar sales to a larger and more dynamic presence online, has slashed its headcount in order to minimize the cash burn required to build-out its non-fungible tokens, or NFT marketplace following a tie-up earlier this year with Australian blockchain startup ImmutableX.

It also fired its CFO, Michael Recupero, and unveiled a four-for-one stock split in early July.

The group is hoping its GameStop Wallet, which allows users to store, send, receive and use both NFTs and cryptocurrencies across decentralized apps, will form the lynchpin of its digital asset strategy. 

The stock has fallen more than 40%, however, since August 16, when Chairman Ryan Cohen revealed plans to dump his entire stake in another meme stock -- Bed, Bath & Beyond  (BBBY) - Get Free Report -- after only five months as an investor.

Cohen's sale of 9.45 million shares netted him a profit of around $60 million, but sparked a backlash among some retailer traders who felt the billionaire activist investor had used their buying momentum to make a quick turnaround trade.

Cohen still holds a 12% stake in GameStop, according to Securities and Exchange Commission filings.

Possibly as a result of Cohen's Bed, Bath & Beyond sale, short interest in GameStop has expanded into Wednesday's earnings, however, with data from S3 Partners showing just over $1.66 billion in bets against the group, a figure that represents around 152.7 million shares, or 20.6% of the stock's outstanding float.