Why GameStop Stock Topped the Market Today

Key Points

• It notched a pair of crushing beats in its second quarter.

• It also declared a somewhat offbeat dividend for its shareholders.

• 10 stocks we like better than GameStop ›

GameStop (NYSE: GME), the poster boy for meme stocks, rose on its own merit in Wednesday's trading session. The video game retailer reported its second-quarter results after market close the previous day, following this up with a rather atypical dividend declaration. Digesting both pieces of news, investors gave the company the thumbs-up by pushing its stock more than 3% higher on Hump Day. That compared quite favorably to the S&P 500 index's 0.3% rise.

Big gains, and a double beat

The quarter's net sales amounted to just over $972 million for GameStop, which was a major (22%) improvement over the same period of the previous year. Speaking of improvements, the company's generally accepted accounting principles (GAAP) net income saw quite the impressive gain, landing at over $138 million ($0.25 per share) from barely over $5 billion in the year-ago frame.

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Image source: Getty Images.

Those figures left the consensus analyst estimates in the dust. The pundits following GameStop were collectively modeling only $823 million for revenue and a mere $0.16 per share for profitability.

The company's coffers are filling up, meanwhile. It reported that cash, cash equivalents, and marketable securities more than doubled over the one-year stretch to $8.7 billion from $4.2 billion. It also has quite the stash of Bitcoin; this was valued at just under $529 million at the quarter's end.

Warrants coming in the mail

In another move made after market close Tuesday, GameStop declared a special dividend in the form of warrants to buy its stock. The company said that each shareholder is to be granted one warrant for every ten shares of the company's common stock they hold, rounded down to the nearest whole warrant. The warrants give their holders the right to purchase one share of common stock for $32.

Investors of record as of Oct. 3 will be eligible to receive the warrant dividend. GameStop said it expects to distribute the warrants on Oct. 7.

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Eric Volkman has positions in Bitcoin. The Motley Fool has positions in and recommends Bitcoin. The Motley Fool has a disclosure policy.