GameStop witnessed a sharp 12% drop in its stock price on Monday following its annual shareholder meeting, which emphasized a serious approach over hype and speculation. CEO Ryan Cohen set the tone with straightforward remarks, asserting the company’s dedication to “building shareholder value over the long term.”
“We are not here to make promises or generate hype. We’re here to put in the work,” Cohen affirmed to investors.
During Monday afternoon trading, GameStop’s shares were valued at $25.21, reflecting a market capitalization of $8.85 billion. Year-to-date, the stock has seen a rise of approximately 51%. The shareholder meeting, initially scheduled for Thursday, was postponed due to overwhelming interest that caused server crashes.
Cohen outlined a strategic plan aimed at reducing costs and enhancing profitability, challenges the company has grappled with in recent quarters.
“Revenue without profitability and the promise of future cash flows hold no real value for shareholders,” Cohen emphasized. “Our strategy involves streamlining our store network while expanding offerings of higher-value items that align with our trade-in model.”
GameStop reported a 28% decline in net sales to $881.8 million for the 13 weeks ending May 4, down from $1.24 billion in the same period last year. The company also reported a narrower net loss of $32.3 million for the quarter, compared to $50.5 million a year ago. These figures were in line with expectations set in a regulatory filing the previous month.
The resurgence of retail investor Keith Gill, known as “Roaring Kitty” online, has added volatility to GameStop’s stock in recent weeks. His return to social media and YouTube livestreams sparked significant price swings, with the stock surging 75% after his initial post and subsequently dropping 40% after his latest livestream.
On Friday, Gill disclosed significant changes to his portfolio, selling all 120,000 of his GameStop call options and acquiring 4 million new shares, increasing his total holdings to over 9 million shares.
Leave a comment