GameStop Stock Surges Then Collapses After Earnings Miss Expectations

gme stock jumps cover image

GameStop Corp. (NYSE: GME) released its first quarterly earnings report since the stock surged from less than $20 per share to more than $500 in January. The stock took center stage as several related stories played out.

GME closed the day at $181.75, declining more than 6.5% on the day.

The company announced earnings of $1.34 per share, missing expectations. According to Yahoo! Finance, earnings of $1.43 per share were expected.

The stock price became extremely volatile after the report release. Initially the share price surged above $198 in after-hours trading, gaining as much as 9%, but the price quickly reversed, dropping as low as $150 per share, a decline of 17%.

The earnings report adds another chapter to the months-long, dramatic saga surrounding GameStop and its stock.

It began when the stock price exploded in late January in a short squeeze, believed to be orchestrated by the users of the Reddit group WallStreetBets.

After several days of volatility, some brokers decided to restrict the buying of GME stock, drawing scrutiny and congressional hearings from lawmakers in Washington D.C.

Eventually, the price of GME stock collapsed and has failed to recapture its earlier highs.

But some investors still believe in a bullish case for the stock as the company reorganizes its leadership.

  • In early February, GameStop appointed Matt Francis, a former Amazon Web Services engineering leader, to the newly-created role of chief technology officer.
  • In late February, GameStop CFO Jim Bell resigned.
  • Today, Reuters reported that GameStop’s chief customer officer (CCO) Frank Hamlin is stepping down on March 31.
  • Earlier this month, GameStop announced that Ryan Cohen, founder of Chewy.com, will join the company to lead its e-commerce team.

GME’s share price has risen after each announced change in leadership.

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