Sept 9 (Reuters) - Shares in GameStop Corp (GME.N) were down 9.2% on Thursday, as the video game retailer's silence on its turnaround plan led its army of individual investors to question the meteoric rise in its share price this year.
The company posted a 25% jump in quarterly sales, but its executives gave no new details for a plan to refashion itself from a mostly brick-and-mortar retailer. The company recently raised more than $1 billion in fresh equity. read more
Its stock last traded at $180.53 a share. While Thursday's price was around 10 times its December price, it compared poorly with its $483 peak in January, when the stock was seeing wild swings at the height of a battle between small-time traders and Wall Street hedge funds.
If GameStop closes lower on Thursday, it will be the fifth straight decline following an earnings update. Still, the pace of the declines appears to have slowed compared with the 30% slide after the company's previous two updates. read more
"This is the third time that investors have expected GameStop management to articulate its strategy and the third time the company failed to do so," wrote Wedbush analyst Michael Pachter, who rates it "underperform" with a $50 price target.
"We think that GameStop will continue to promise and to fail to deliver a strategy to its investors, and will seek ways to increase online sales while it holds investors at bay."
A man walks in front of a GameStop store in the Jackson Heights neighborhood of New York City, New York, U.S. January 27, 2021. Picture taken January 27, 2021. REUTERS/Nick Zieminski/File Photo
Going into the first post-earnings conference call by new Chief Executive Matt Furlong, investors had been looking for details on efforts by Chairman Ryan Cohen to focus on e-commerce.
But the call lasted less than 10 minutes and "the CEO did not mention consoles or video games and, given that the company completely relies on them, it was quite remarkable," said Neil Campling, global technology, media and telecommunications analyst at Mirabaud Securities.
GameStop faces competition from Microsoft Corp's (MSFT.O) Xbox, which is building its own streaming devices for cloud gaming to reach gamers on any television or monitor without the need for a console. read more
Net sales in the second quarter jumped to $1.18 billion, but GameStop also posted a bigger-than-expected adjusted loss of 76 cents per share.
Social media forums were abuzz with individual investors complaining about the lack of disclosure about GameStop's strategy.
"I understand Cohen's belief in keeping your strategy close to your chest so the competition won't know what you're doing, but I'd like to learn something," one user wrote on Reddit's WallStreetBets. "Regardless, I'm not selling."
Reporting by Sagarika Jaisinghani, Medha Singh, Nivedita Balu in Bengaluru, Sinéad Carew in New York ; Editing by Shounak Dasgupta, Arun Koyyur and Jonathan Oatis
Our Standards: The Thomson Reuters Trust Principles.
"Exit" - Google News
September 09, 2021 at 11:52PM
https://ift.tt/3lc2fQm
Investors make an exit as GameStop goes quiet on rejig - Reuters
"Exit" - Google News
https://ift.tt/2zNkU0N
https://ift.tt/2YrnuUx
Bagikan Berita Ini
0 Response to "Investors make an exit as GameStop goes quiet on rejig - Reuters"
Post a Comment