GameStop stock plummeted early Friday after the video game retailer unexpectedly moved up its Q1 report and announced a new major share offering. The premarket action erased GME stock’s gains from Thursday’s rally following the releases.
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GameStop (GME) reported a loss of 11 cents per share, narrowed from a loss of 17 cents per share the year prior. Net sales tumbled nearly 29% to $881.8 million. FactSet analysts expected a loss of 9 cents per share on $995.3 million in sales.
The company’s net loss tightened to $32.3 million vs. $50.5 million last year. The results were in-line with GameStop’s preliminary results reported May 17. The retailer at the time guided net sales to range from $872 million to $892 million on a net loss between $27 million to $37 million.
The earnings results came earlier than expected. GameStop on May 30 scheduled its Q1 report for late Tuesday, June 11.
Separately, GameStop announced plans to sell up to 75 million shares of common stock. The company plans to use to the proceeds for general corporate purposes, which may include acquisitions and investments. GameStop also said it previously sold 45 million shares from its May 17 offering, which generated $933.4 million in gross proceeds.
The company in mid-May also filed a shelf registration statement with the SEC. Shelf registrations allow companies to issue more stock to sell at a future date in one more multiple offering rounds.
The filing noted that GameStop’s charter allows it to issue up to 1 billion shares of common stock and up to 5 million shares of preferred stock. There were 306.187 million shares of GME common stock outstanding as of May 4.
GameStop said it plans to use the future proceeds from the offering for working capital and general corporate purposes, as well as potentially invest in certificates of deposit (CDs) and U.S. Treasury securities.
Meanwhile, meme trader Keith Gill, also known as Roaring Kitty online, is scheduled to host his first YouTube livestream in over three years at noon Friday. Many meme investors online believe he will discuss his GME position during the livestream.
GameStop Stock
GameStop stock unraveled more than 23% premarket Friday to trade around 38, after surging more than 30% overnight before the earnings-and-offering news. GME stock on Thursday vaulted 47.5% after Gill scheduled the YouTube event, closing at 46.55.
GameStop shares doubled this week through Thursday’s close.
The stock rallied 165% in 2024 prior to Friday’s early fall.
You can follow Harrison Miller for more stock news and updates on Twitter @IBD_Harrison
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