GameStop (GME -2.34%) surprisingly beat revenue estimates for the third quarter but widely missed analysts' earnings projections. Once again, the video game retailer limited its earnings conference call to just management's prepared remarks and shut Wall Street out from asking any questions.

With any other stock, GameStop's performance would be considered a poor one. Why? Because it is a company trying to engineer a turnaround, seeing escalating costs, burning through twice as much cash as it had a year ago, and offering little to no insight into what it is doing to turn its business around.

Despite that, there's actually a lot to suggest that GameStop just might be able to engineer this reversal of fortune and why I say it's a meme stock that is still a solid long-term pick.

Five people playing video games

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Spending money to make money, maybe

Although revenue rose 29% to just under $1.3 billion, putting it closer to where it was in 2019 when it generated $1.4 billion in sales, GameStop saw losses widen significantly in the period to $1.39 per share from $0.53. The price was far greater than the $0.58 per share loss analysts were anticipating.

Expenses also jumped year over year to $421.5 million, but the 17% growth rate was less than what it was experiencing in sales growth. Considering that it is investing heavily in being able to confront a future of gaming that's increasingly digital and online, that shouldn't be unexpected.

For example, the company recently opened a new customer care facility in Florida, for which it just hired 500 employees. It says the facility will be a key element of its future growth plans. It's one of several infrastructure investments GameStop has made in recent months, including two large fulfillment centers in Nevada and Pennsylvania that add more than 1 million square feet of warehouse space.

GameStop is also filling up that space with merchandise and notes that it continues to front-load inventory, which rose to $1.1 billion for the period. Considering the supply chain issues hampering other retailers, GameStop's spending in this space is not unwarranted.

Forklift unloading a truck

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Building out and up

The real problem for most is the video game company being tight-lipped about exactly what it will do with all that space. It started the year with three distribution facilities but has since added new Amazon-sized fulfillment centers in York, Pennsylvania, and Reno, Nevada. Now it also has this "customer care" center in Florida.

If it wants to be able to meet the online gaming world head-on, GameStop will need to be able to get products to gamers quickly. Building out this massive footprint will be essential to achieving chairman Ryan Cohen's vision of turning GameStop into the "Amazon of gaming."

So while Cohen and CEO Matt Furlong don't offer much detail on where they're taking the video game retailer, watching from the sidelines should allow an observer to glean what's going on: GameStop is filling its new warehouses with products that it can speedily ship to its customers. 

Although obvious, what's lacking is the level of granularity of where GameStop is going. Investors typically look forward to greater insights into the business and how it's performing in relation to the company's plans, but the video game retailer is eschewing such details. Instead, management dangles ideas as if their mere mention is sufficient.

One person whispering to another

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Hints and whispers aren't enough 

Furlong noted that GameStop has "been exploring emerging opportunities in blockchain, NFTs, and Web 3.0 gaming." And that was it. No further discussion was offered about how that will help the retailer's recovery. It would have also been nice to hear more about the partnerships with Samsung, LG, Razer, Vizio, LogitechAsus, and others that GameStop teased.

Simply saying buzzwords and catchphrases is not enough. Management shouldn't be able to say "just trust us" when so many companies have used opaque reporting in the past to actually cover up fraud.

It is, of course, a growing trend among meme stocks to snub Wall Street. AMC Entertainment (AMC -5.00%) has also gone this route with chairman and CEO Adam Aron prioritizing individual investor questions over those from analysts. 

Small investors seem willing to give Cohen and company sufficient leash to do what's necessary for GameStop to reverse course, at least for now. Wall Street isn't so forgiving, and in morning trading the day of the earnings report, GameStop's stock was down 5% from where it closed previously.

The negative response isn't quite warranted, but GameStop may want to shine more light on what the video game retailer is doing sooner rather than later.