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GameStop shares fall after it files to sell securities, says first quarter sales declined
Omar Marques | Lightrocket | Getty Images
GameStop shares tumbled 17% in premarket Friday after the video game retailer said it plans to sell securities and reported preliminary results that showed a sales decline in the first quarter.
The firm said it now expects net sales to be in the range of $872 million to $892 million, down from compared to $1.237 billion in the same quarter last year. Two analysts polled by FactSet expected first quarter revenue of around $1 billion.
The brick-and-mortar video game company has been grappling with stiff competition from e-commerce-based competitors.
In a separate filing, GameStop indicated its plan to offer securities for an undisclosed amount. The company said it could be a mixed offering of common stock, preferred shares and depositary shares, warrants, purchase contracts, units and subscription rights that may be convertible into common stock.
The move followed a swift rally in the beginning of the week after the return of “Roaring Kitty,” the man who inspired the epic short squeeze of 2021, triggered a retail trading frenzy. The rally only lasted two days, however, with much smaller net retail trader inflows compared to the trading mania three years ago.
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