Sept 11 (Askume) – Shares of widely followed meme stock GameStop (GME.N) fell 10% in premarket trading on Wednesday after the video game retailer reported a sharp drop in quarterly revenue , raising concerns about its ability to handle questionable returns.
The company, which is getting increased attention from retail investors after the meme stock craze pushed its shares to exciting levels in early 2021, is looking to boost sales and profitability by operating a network of smaller stores and is trying to restructure itself by focusing on selling more value-added items.
GameStop’s revenue fell 31% in the most recent quarter, hurting net profit growth. It also announced plans to sell 20 million shares to fund acquisitions.
GameStop, led by Keith Gill (aka “Roaring Kitten”), a key figure in the so-called “Reddit rally,” raised more than $3 billion through a stock offering in May and June. Its stock has fluctuated wildly since the bullish bets were made.
The stock more than doubled in May after Gill returned from a three-year hiatus, but fell 40% in June as Gill’s livestream failed to spark investor interest.
Still, the stock was up nearly 34% as of Tuesday. It was trading at $21.14 in pre-market trading on Wednesday.
GameStop’s stock price hit an intraday peak of around $121 in January 2021, up from around $10 a few days earlier, creating a roller coaster ride for investors, but declined to around $121 over the next month.
