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What happened:GameStop (GME) stock jumped about 5% on Monday.
What’s behind the move:The video game retailer announced preliminary results for its second quarter, saying it expects a boost in Q2 profit in part due to its stake in eBay (EBAY).
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The video game retailer said it expects net income of $290 million to $310 million for its quarter ending Aug. 1, compared to net income of $168.6 million in the prior year’s second quarter.
GameStop converted its eBay derivative position into eBay shares, which generated about $238 million in gains. The video game retailer owns 43.4 million shares of eBay common stock, valued at more than $4.9 billion. The eBay stake is doing the heavy lifting for the company’s bottom line, as the company’s revenue is expected to show a decline.
GameStop’s sales are expected to come in between $780 million and $800 million for the quarter, down from $972.2 million last year. The company expects to release its complete second quarter results on Sept. 8.
What else you need to know:GameStop released the preliminary numbers on Monday in connection with an amendment to its private exchange of $1.4 billion in convertible notes revealed earlier this month.
GameStop stock is down 11% year to date. Earlier this year, the company made an unsolicited $56 billion bid to purchase eBay, a move that was later rejected by the online marketplace.
Ines Ferre is a senior business reporter for Yahoo Finance.
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