Skip to main content

Market Overview

GameStop Shares Tumble 11% In Premarket: What's Behind The Sudden Drop?

Share:
GameStop Shares Tumble 11% In Premarket: What's Behind The Sudden Drop?

GameStop Corp. (NYSE:GME) shares fell nearly 11% on Wednesday during pre-market trading after the company reported disappointing second-quarter revenue figures. GameStop’s net sales for the quarter were $798.0 million, falling short of the $895.7 million consensus estimate.

What Happened: GameStop’s revenue saw a decline from $1.16 billion in the same quarter last year. Despite the revenue miss, the company posted a profit of $0.1 per share, surpassing the expected loss of $0.9 per share.

At the time of writing, GameStop was trading at $20.85 while it closed at $23.45 on Tuesday, as per Benzinga Pro.

All three of GameStop’s business segments experienced year-over-year declines. Hardware and Accessories net sales were $451.2 million, down from $597.0 million. Software sales dropped to $207.7 million from $397.0 million, and Collectibles fell to $139.4 million from $169.8 million.

See Also: Apple Launched iPod Nano 19 Years Ago: If You Invested $1000 In Apple Stock When Steve Jobs Revealed His Vision For Music, Here’s How Much You’d Have

GameStop concluded the second quarter with $4.2 billion in cash, cash equivalents, and marketable securities. The company also announced it would not be holding a conference call to discuss the results.

Why It Matters: The recent drop in GameStop shares comes amid a series of events involving Keith Gill, also known as “Roaring Kitty.” Earlier this year, experts raised concerns that Gill was exploiting regulatory gaps in the market through his trading activities involving GameStop.

In July, a class-action lawsuit against Gill was voluntarily dismissed, which alleged that he manipulated GameStop's stock price. This dismissal came after Gill disclosed a significant passive stake in Chewy Inc.

Read Next:

Image via Shutterstock

This story was generated using Benzinga Neuro and edited by Pooja Rajkumari

 

Related Articles (GME)

View Comments and Join the Discussion!

Posted-In: Pooja Rajkumari Roaring Kitty Stories That MatterNews WIIM Pre-Market Outlook Markets General

Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
SPAC
Everything you need to know about the latest SPAC news.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com