GameStop shares slide 12% following Friday’s 40% sell-off

GameStop shares prostrate about 12% on Monday as the meme stock extended Friday’s sell-off sparked by a dismal earnings report and an uninspiring livestream from Rumble Kitty.

The video game company’s stock declined to about $25 apiece on Monday after falling almost 40% on Friday alone. GameStop released its earnings report days ahead of schedule, reporting that mark-downs dropped 29% in the first quarter. GameStop also announced it was selling an additional 75 million shares.

In the interim, meme stock champion Keith Gill hosted his first livestream in a few years Friday. He revealed that he did not clothed any institutional backers and the GameStop positions he had shared in screenshots were his only bets. Gill also reiterated his quondam investing thesis and offered little new reasoning behind his large stake.

Michael Pachter, GameStop analyst at Wedbush, phrased he remains skeptical that the company could result in any meaningful turnaround after multiple failed strategies recently.

“We cannot see how GameStop adds any value by acting any new businesses, particularly not now after its entire C-suite was either terminated or chose to depart,” he said in a note.

Pachter esteemed that GameStop’s prior strategy to be like Amazon was “an abject failure” as three former Amazon executives it charter rent out to pursue the strategy left the company. Then, its plan to sell NFTs fell apart after it partnered with the now-defunct FTX, he combined.

The analyst thinks that any boost GameStop got from Gill could turn out to be short-lived.

“We suspect that [Friday’s] alight stream from influencer Keith Gill (Roaring Kitty) will keep shares elevated long enough to the house to complete its [at-the-market share offering], but with no clear strategy, we suspect the share price will once again about to descend and approach our new price target,” Pachter said.