Share Prices of GameStop Experience a Drop Following Release of Earnings Data
As per the latest reports, the share prices for GameStop have experienced a drop on Wednesday, September 8, 2021 trading. The reports show that the share prices of video game retailers have experienced a 7% drop.
According to reports, the share prices of the company experienced a drop following the release of earnings report data for the second quarter of 2021. In the report, GameStop reported that the loss it incurred was lower than expected for the particular quarter.
Even after reporting a narrower loss than expectations, the company ended up experiencing a drop in its share prices.
After sharing the earnings report for the respective quarter, it was expected GameStop for sharing the upcoming quarters’ outlook. It was also expected that the company would proceed with answering the questions and concerns of the investors and analysts.
However, GameStop’s team neither laid out an outlook nor did it take or answer any of the questions that the attendees had to ask of them. It was reportedly the first call hosted by the new CEO and CFO of GameStop. GameStop’s new chief executive officer is Matthew Furlong, while his new chief financial officer is Mike Recupero. Both executives have recently taken up their roles as the leaders of the company.
In the report, GameStop also shares a piece of information that might have triggered concerns in the investors. The executives revealed that they had recently been approached by the US Securities and Exchange Commission (SEC), requesting more documentation surrounding a probe.
It had been reported by inside sources that the video gaming retail platform had been approached by the US SEC in regards to its trading activities and services. This information was later confirmed by GameStop back in May, where it revealed that the US SEC had indeed reached out to it.
Although the company predicted that the US SEC’s investigation won’t impact its business, operations, or stocks, the company did end up taking a hit to its share prices.
Since the beginning of 2021, GameStop has been one of the firms that have recorded a tremendous craze from the investors’ end for its meme stocks. Ever since the year began, its share prices have spiked, experiencing a 957% rise.
Ever since it gained prominence, its share prices have demonstrated high volatility. The short, retail, and mainstream trades have kept the meme stock in a very turbulent flight.
At the time of writing, the market capitalization of GameStop is at $14.28 billion and the number keeps rising. Even after reporting losses in the past quarters, the company has continued recording a significant rise in its market capitalization.