Earnings

GameStop shares drop after retailer posts 29% sales decline, reveals stock sale plan

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GameStop, the video game retailer currently riding another wave of trading enthusiasm spurred on by the meme trader “Roaring Kitty,” showed no signs of an operational turnaround in its dismal fiscal first-quarter results.

The company on Friday posted net sales of $881.8 million for the period, down 29% from $1.237 billion a year prior. The sales decline was steeper than the two Wall Street analysts who cover the stock expected. Their estimates were in a range of $900 million to $1.09 billion per FactSet.

GameStop lost $32.3 million during the quarter, a narrower loss than the $50.5 million suffered in the year-earlier period.

The company also gave an update on its ongoing stock sales, saying it would sell an additional 75 million shares on top of the 45 million share sale it had announced in May that raised more than $900 million.

The first-quarter results came as a surprise. The company — which would be the subject of a YouTube livestream by Keith Gill, better known as Roaring Kitty later Friday — was supposed to release results on the following Tuesday after the bell.

GameStop shares plunged 40% Friday. The stock had traded 30% higher at one point in overnight trading before the earnings report. The stock rallied 47% on Thursday in anticipation of Gill’s livestream.

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In the livestream, Gill revealed that he didn’t have any institutional backers and the GameStop positions he had shared in screenshots were his only bets.

Gill also reiterated his previous investing thesis in GameStop, betting on a turnaround under CEO Ryan Cohen and offering little new reasoning behind his large stake.

GameStop has been on a tear since Gill began posting after a roughly three-year hiatus. Quarter to date, the stock is up more than 271%.

Correction: This story has been updated to correct the number of additional shares GameStop is selling.

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