Reddit user Keith Gill, who is credited with driving GameStop’s stock price up, broadcasts a YouTube livestream from his laptop at the New York Stock Exchange on June 7, 2024.
Michael Nagel | Bloomberg | Getty Images
GameStop The company’s shares fell about 12% on Monday as the meme stock faced further selling pressure on Friday sparked by poor earnings and a lackluster Roaring Kitty livestream.
The video game company’s shares fell to about $25 per share on Monday after dropping nearly 40% on Friday alone. GameStop released its earnings report several days ahead of schedule, reporting a 29% drop in first-quarter sales. GameStop also announced it would sell an additional 75 million shares.
Meanwhile, meme stock champion Keith Gill hosted his first livestream in years on Friday. He made it clear that he had no institutional backing and that his GameStop stock position, which he shared in a screenshot, was his only bet. Gill also reiterated his previous investment thesis and offered few new reasons behind his large investment.
Wedbush GameStop analyst Michael Pachter said he remains skeptical that the company can mount a meaningful turnaround after multiple recent failed strategies.
“It is unclear how GameStop will add value by expanding into new businesses, especially now that the entire executive team has either been fired or chosen to leave the company,” he said in the memo.
Pachter noted that GameStop’s previous strategy to imitate Amazon was a “total failure” after three former Amazon executives hired to further that strategy left the company, and plans to sell NFTs then fell apart after the company partnered with the now-defunct FTX, he added.
Analysts believe the benefits GameStop gained from Gill may not last.
“we, [Friday’s] A livestream from influencer Keith Gill (Roaring Kitty) will likely keep the stock price high until the company completes. [at-the-market share offering]”However, without a clear strategy, we expect the stock price to fall again and approach our new target price,” Pachter said.
