GameStop's shares plummet 16% after a 40% sell-off on Friday.
- GameStop shares fell more than 16% on Monday.
- GameStop reported a 29% decline in sales during the first quarter, ahead of schedule.
- On Friday, Keith Gill hosted his first livestream in several years.
On Monday, shares fell more than 16% due to the meme stock's continuation of Friday's sell-off, which was caused by a poor earnings report and a lackluster livestream from Roaring Kitty.
On Monday, GameStop's stock price dropped to just below $24 per share after falling nearly 40% on Friday. The company released its earnings report early, reporting a 29% decline in sales in the first quarter. Additionally, GameStop announced it would be selling an additional 75 million shares.
On Friday, Keith Gill hosted his first livestream in several years. During the stream, he disclosed that he had no institutional support and that the GameStop positions he had displayed in screenshots were his only investments. Additionally, Gill reaffirmed his prior investment thesis and provided minimal fresh rationale for his substantial position.
Wedbush GameStop analyst Michael Pachter expressed doubt about the company's ability to achieve a significant turnaround following several unsuccessful strategies.
"The C-suite of GameStop has either been terminated or chosen to depart, making it difficult to see how the company can add value by operating any new businesses at this time," he stated in a note.
GameStop's attempt to emulate Amazon's strategy was a complete failure, as three former Amazon executives who were hired to execute the plan left the company. Additionally, its plan to sell NFTs fell apart after partnering with the now-defunct FTX, according to Pachter.
The analyst believes that any gains GameStop experienced due to Gill's influence may be temporary.
Pachter stated that he believes Friday's live stream from influencer Keith Gill (Roaring Kitty) will keep shares elevated long enough for the company to complete its at-the-market share offering. However, without a clear strategy, he suspects the share price will once again begin to descend and approach their new price target.
Markets
You might also like
- Japan's stocks are declining following Shigeru Ishiba's victory.
- The last trading session of September in Europe is expected to begin with a decline.
- Major cities in China ease homebuying restrictions, prompting a rally in property stocks.
- Japan's Nikkei drops by 3%, while Australia reaches a new record high, as investors anticipate the release of China's data.
- Blockchain technology could revolutionize the ETF industry by enabling the use of treasurys as assets.