GameStop actions are reduced to a lack of rejection details

September 9 (Reuters) – GameStop Corp (GME.N) shares gained a small gain on Thursday after falling to 10.5% before the session, even when the video game retailer’s silence on its investment plan led its army of individual investors to question the meteoric rise in stock prices this year.

The company posted a 25% jump in quarterly sales, but its executives gave no new details on a plan to reform from a mostly brick-and-mortar retailer. The company has recently raised more than $ 1 billion in new equity. Read more

Shares of GameStop closed up 0.2% at $ 199.18 after hitting a low of $ 178 during the session. Thursday’s close was more than ten times the close of $ 18.84 at the end of 2020. But it was badly compared to a peak of $ 483 reached in January, when stocks saw wild fluctuations at the height of ‘a battle between short-lived traders and Wall Street. hedge funds.

Thursday marked the first time stocks ended in positive territory in the session after a profit update after declining the last four times. And GameStop had dropped about 30% after its two previous updates. Read more

“This is the third time investors have expected GameStop management to articulate its strategy and the third time the company has not done so,” wrote Wedbush analyst Michael Pachter, who considers it “insufficient” with a target price of $ 50.

“We believe GameStop will continue to promise and fail to deliver a strategy to its investors and look for ways to increase online sales while keeping investors at bay.”

Entering the new post-earnings conference call for new chief executive Matt Furlong, investors had been looking for details about President Ryan Cohen’s efforts to focus on e-commerce.

But the call lasted less than 10 minutes and “the CEO didn’t mention the consoles or the video games and, given that the company completely trusts them, it was pretty remarkable,” said Neil Campling, global analyst at Mirabaud Securities technology, media and telecommunications.

GameStop faces competition from Xbox Corp. of Microsoft Corp. (MSFT.O), which builds its own streaming devices for cloud gaming to reach gamers from any TV or monitor without the need for a console. Read more

Second-quarter net sales rose to $ 1.188 billion, but GameStop also posted a larger-than-expected adjusted loss of 76 cents per share.

Social media forums were upset with investors complaining about the lack of disclosure about GameStop’s strategy.

“I understand Cohen’s belief of keeping your strategy close to your chest so the competition doesn’t know what you’re doing, but I’d like to learn something,” one user wrote on RedSit’s WallStreetBets. “Regardless, I’m not selling.”

Reports from Sagarika Jaisinghani, Medha Singh, Nivedita Balu to Bengaluru, Sinéad Carew to New York; Edited by Shounak Dasgupta, Arun Koyyur and Jonathan Oatis

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