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GameStop plans stock split, BlackBerry stock lower after earnings

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Yahoo Finance Live's Julie Hyman and Brian Sozzi discuss the dip in BlackBerry shares after earnings report data and the rise in GameStop shares as the company announces its plans for a stock split.

Video Transcript

JULIE HYMAN: Well, jobs may be the main course today, but we got a healthy side of meme stocks as well, or unhealthy, I guess, depending on how you look at it. And we are talking about GameStop today. Sozzi enjoying my analogies today. GameStop shares are indicating a gain of 14%. That's how they're trading in the premarket. And that's after the company said it wanted to split its shares. It wants to boost the number of authorized shares to a billion from 300 million to do a stock split. It's waiting to get shareholder approval to do so. And we've got the halo effect from that, of course, as we typically do with the meme stocks. AMC, for example, trading higher as well. Sozz, to your point, though, we're still-- we'd like some more details perhaps on how GameStop is going to use these proceeds. BRIAN SOZZI: Well, maybe, Julie, they're just going to spend billions of dollars on computer servers to build out their NFT marketplace. They have a lot of cash on their balance sheet. So for them to potentially go out there and sell more shares to raise more cash, I'm just-- it's unclear. We have not heard a clear definitive plan from Ryan Cohen or the company's new CEO. It's just a fascinating situation to continue to cover, because keep in mind, again, this is a company that still operates thousands of brick and mortar retailers, not just in the US, it's also overseas. Those are lease obligations they have to pay. Those are costs. Those are human beings they actually have to have in these stores. So it's just, I think, a reminder today that GameStop's the stock has completely detached, really, from any fundamental reality that the company is likely to produce over the next year. JULIE HYMAN: Well, what's been interesting to me about this latest surge in the meme stocks is that there was sort of this conventional wisdom that, oh, when the economy gets back on track, when people aren't getting stimulus checks anymore, when they're not sitting at home, that they'll turn away from meme stocks. And they did for a while. But now a lot of people are coming back. So it's kind of an interesting phenomenon that we're watching here. There's one more stock that we're watching this morning that has been memed at times. And it's actually out with its earnings. That is BlackBerry. Those shares, though, are not benefiting from this halo effect, if you will. The BlackBerry shares are trading down now by 7%. Losses have actually accelerated. So the company reported its fourth quarter numbers. It came out with an outlook that is being read by analysts as disappointing after revenue last quarter missed estimates. Excuse me-- earnings per share also missing estimates. And so that's why we're seeing the shares down today. BRIAN SOZZI: I'm putting BlackBerry, Julie, in my penalty box. And in that penalty box, of course, is Stitch Fix. And now BlackBerry is the newest entrants because this quarter stunk. I have more words for it, but I can't actually say it on livestreaming television. I want to lock in right on their cybersecurity business. Sales for that business, which is what BlackBerry is essentially is now, they don't sell phones. They haven't in some time. Do not tweet me that stuff, and they're not coming back with phones. So they are essentially a cybersecurity play at this point. Sales and cybersecurity flat year over year. Gross profit margins for that segment down 100 basis points year over year, in a time where every company known to man is increasingly very worried about cybersecurity tax. You look at companies like Cloudflare, Crowdstrike blowing it away every quarter. BlackBerry just can't get the job done. They're completely irrelevant right now. JULIE HYMAN: Wow, OK, as usual, telling us how he really feels. Brian Sozzi, I should just mention one quick correction there. The company did not miss with earnings per share. Analysts were predicting a loss, and they actually reported a profit of a penny a share. I was misreading my notes.