GameStop shares slide 16% following Friday's 40% sell-off
In this article
GameStop shares fell more than 16% on Monday as the meme stock extended Friday's sell-off sparked by a dismal earnings report and an uninspiring livestream from Roaring Kitty.
The video game company's stock declined to just below $24 apiece on Monday after falling nearly 40% on Friday alone. GameStop released its earnings report days ahead of schedule, reporting that sales dropped 29% in the first quarter. GameStop also announced it was selling an additional 75 million shares.
Meanwhile, meme stock champion Keith Gill hosted his first livestream in a few years Friday. He revealed that he did not have any institutional backers and the GameStop positions he had shared in screenshots were his only bets. Gill also reiterated his previous investing thesis and offered little new reasoning behind his large stake.
Michael Pachter, GameStop analyst at Wedbush, said he remains skeptical that the company could result in any meaningful turnaround after multiple failed strategies recently.
«We cannot see how GameStop adds any value by operating any new businesses, particularly not now after its entire C-suite was either terminated or chose to depart,» he said in a note.
Pachter noted that GameStop's prior strategy to be like Amazon was «an abject failure» as three former Amazon executives it hired to pursue the strategy left the company. Then, its plan to sell NFTs fell apart after it partnered with the now-defunct FTX, he added.
The analyst thinks that any boost GameStop got from Gill could turn out to be short-lived.
«We suspect that [Friday's] live stream from influencer Keith Gill (Roaring Kitty) will keep shares elevated long enough to the company to complete its [at-the-market share offering], but with no clear
Read more on cnbc.com
