GameStop shares drop as first earnings report released since Reddit-led GameStop rally

GameStop shares drop as first earnings report released since Reddit-led GameStop rally

GameStop released its first earnings report on Tuesday since it received international attention in a Reddit-fueled buying rally and named former Amazon and Google chief Jenna Owens, as new general manager.

The company’s sales and profit figures were slightly lower than analysts had expected and its shares, which had fallen 6.5% during the day, briefly gained 8% after-hours trading before trading. fall by more than 15%.

For the fourth quarter of 2020, GameStop’s net sales were $ 2.12 billion compared to $ 2.19 billion in the fourth quarter of fiscal 2019. Net profit was $ 80.5 million, both numbers were lower than analysts’ forecasts.

Between December and the end of January, shares of the struggling video game retailer had soared 1,700% as an army of small investors who gathered around the Reddit WallStreetBets forum piled on the company.

Investors had bet Wall Street investors had bet that the stock price would collapse and his declining fortunes would recover after Ryan Cohen – founder of Chewy, the pet supply store online – bought a stake in the company and joined their board.

The extraordinary price spikes of GameStop and other so-called meme stocks have led to congressional inquiries into the markets and the Robinhood trading app.

Stocks which had been as low as $ 13 in December peaked at $ 347 on January 27 before collapsing once more in February and picking up again in March. On Tuesday, before GameStop updated investors, the share price stood at $ 181, valuing the company at $ 12.7 billion.

Ahead of the release, GameStop announced that its director of clientele, Frank Hamlin, was stepping down, the latest in a series of outings since Cohen joined the board.

After the call for results ended early, without CEO George Sherman’s usual Q&A session, some on Reddit complained about the lackluster call. “Yeah, that call was pretty awful. No questions?? After the most volatile thing we’ve seen in the stock market… maybe ever? It was disheartening, ”wrote a Redditor.

“Guys are relaxing, nothing has changed after this report. We knew nothing had changed. Relax, ”posted another.


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