KNOWLEDGE is POWER / REAL NEWS is KEY
New York: Tuesday, July 16, 2024
© 2024 U-S-NEWS.COM
Online Readers: 314
New York: Tuesday, July 16, 2024
Online: 313
Join our "Free Speech Social Platform ONGO247.COM" Click Here
Science & Tech: Gamestop Shares Tank After Ceo Says Store

SCIENCE & TECH: GameStop shares tank after CEO says store network will shrink despite huge cash pile

🔴 Website 👉 https://u-s-news.com/
Telegram 👉 https://t.me/usnewscom_channel


Shares of GameStop tumbled on Monday after CEO Ryan Cohen told investors that the videogame retailer plans to operate a smaller network of stores and gave no details on what it plans to do with its cash pile.

GameStop shares closed down 12% at $25.22 on Monday after the annual general shareholder meeting, which lasted about 20 minutes.

Cohen said he anticipates the business will be operated with “a smaller network and more value-added” items as part of the company’s attempt to boost sales and profitability.

GameStop plans to reduce its storefronts. TANNEN MAURY/EPA-EFE/Shutterstock

He did not reveal how the company will use its roughly $4 billion in cash, which it built up following share sales in June and May, saying only that having a stronger balance sheet is “always an advantage.”

Shares of the video game retailer have gyrated wildly over the last month after Keith Gill, the stock influencer known as Roaring Kitty who helped kick off meme-stock mania in 2021, reappeared and later disclosed a large position in GameStop.

Investors had been hoping that Cohen would reveal more details of a strategic plan to revitalize GameStop’s business, analysts said.

Cohen’s lack of detail on acquisition plans “is disappointing for at least some investors,” said Michael Pachter, an analyst at Wedbush Securities with a price target of $13.50 on the company.

Pachter noted that GameStop’s recently released filings showed a profit margin of about 36%, suggesting the company is doing well in reselling used software and hardware. On the other hand, competition remains intense in the market for gaming consoles while the second-hand market for used software is slowly drying up as gamers shift to digital downloads, he said.

CEO Ryan Cohen said he anticipates the business will be operated with “a smaller network and more value-added” items as part of the company’s attempt to boost sales and profitability.

The company has been grappling with slowing sales as its core business of selling new and pre-owned videogame disks takes a hit from consumers’ move to downloading games digitally or streaming. Net sales fell to $881.8 million compared with $1.24 billion a year ago, the company said on June 7, when it reported earnings earlier than expected.

GameStop raised $933 million by selling shares to cash in on a meme stock rally last month, when the stock doubled in value and an additional $2.14 billion earlier this month. Still, shares are down sharply from their May peak and down more than 70% from 2021 intraday highs.

Shares of the video game retailer have gyrated wildly over the last month after Keith Gill, the stock influencer known as Roaring Kitty who helped kick off meme-stock mania in 2021, reappeared and later disclosed a large position in GameStop.

Gill triggered the most recent wave of exuberance among retail investors after he disclosed ownership of 5 million GameStop shares and 120,000 June $20 strike call options in a screen shot posted on Reddit on June 2.

Gill updated his position last week to show he owned about 9 million shares and no options on the company.



Source link

OnGo247
New 100% Free
Social Platform
ONGO247.COM
Give it a spin!
Sign Up Today
OnGo247
New 100% Free
Social Platform
ONGO247.COM
Give it a spin!
Sign Up Today