HomeFinancial MarketsGameStop Tumbles 40% Amid Big Stock Sale Announcement

GameStop Tumbles 40% Amid Big Stock Sale Announcement

After recording significant gains last week, the stock of video game and electronics retailer GameStop has now plunged almost 40%. The sudden change in trajectory comes after the company released a poor quarterly report while also announcing a big stock sale.

GameStop shares jumped around 28% last week after a financial influencer Keith Gill, aka “Roaring Kitty,” revealed he made a significant investment of $116 million in the company’s stock. Gill was one of the main figures in the short squeeze in January 2021 that caused GameStop shares to balloon to around $500 per share.

However, the company’s stock has nosedived after a quarterly report showed it generated $881.8 million in net sales, marking a 29% decrease from $1.237 billion in the same period last year. Wall Street analysts expected the net sales to come in the range of $900 million to $1.09 billion. It also recorded an adjusted loss of $0.12 per share compared to an expected $0.09 loss per share.

Additionally, GameStop announced it will offer 75 million shares at the market price. The company made a similar move in May when it generated $933.4 million from selling 45 million shares.

The trading of GameStop shares has been halted several times on Friday due to high volatility. The stock dropped to $28.22 per share compared to Thursday’s peak price of $61.27.

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