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