GameStop experienced a significant drop in its shares on Monday, with a decrease of about 12%. This decline was a continuation of the sell-off that began on Friday, triggered by disappointing earnings and an unimpressive livestream by Roaring Kitty. The stock price of the video game company fell to around $25 per share on Monday, following a substantial 40% drop on Friday alone.
The company released its earnings report earlier than scheduled, revealing a 29% decrease in sales for the first quarter. In addition to the disappointing financial results, GameStop also announced plans to sell an additional 75 million shares. Keith Gill, a prominent figure in the meme stock movement, hosted a livestream on Friday where he disclosed that he did not have any institutional support and that his GameStop positions were his sole investments. However, Gill did not provide any new insights or reasons behind his significant stake in the company.
Analyst Michael Pachter from Wedbush expressed skepticism about GameStop’s ability to turn its fortunes around, especially after a series of unsuccessful strategies. Pachter highlighted that the company’s attempts to emulate Amazon’s business model failed, with key executives leaving after the strategy faltered. Additionally, GameStop’s venture into selling NFTs collapsed following a partnership with FTX. Pachter believes that any temporary boost in GameStop’s stock price due to Keith Gill’s livestream is unlikely to be sustained in the absence of a clear strategy, predicting a potential decline in share value in the near future.
