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GameStop (GME) -34% after Q4 earnings and revenue misses
GameStop Corporation (GME) shares cratered 34% on Wednesday after the video game retailer’s earnings and revenues came up short of the Wall Street consensus in Q4.
Late on Tuesday, GameStop posted net income of $80.5m or $1.34 adjusted earnings per share, and $2.12bn revenue versus the $1.35 and $2.21bn expectations.
Despite these misses, digital sales were strong, soaring 175% year over year as more people turned to the company’s website for new titles during the pandemic.
In a statement, CEO George Sherman said: “Our emphasis in 2021 will be on improving our E-Commerce and customer experience, increasing our speed of delivery, providing superior customer service and expanding our catalogue.”
The year has already been memorable for GameStop following recent international attention driven by its status as a ‘meme’ stock and its incredible rally on the New York Stock Exchange.
After smaller investors on Reddit attempted to expose short sellers by investing in the stock, GameStop shares skyrocketed 1,700%.
Shares were trading at just $13 back in December before soaring to $347 a month later, though the bubble has burst somewhat since then.
On Wednesday, GME slumped into the red and eventually closed 33.79% lower at $120.34.
While it’s hard to know GameStop’s true value at the moment due to the volatility in share price, investors are unlikely to have been buoyed by the company’s ninth consecutive quarterly sales decline.
GameStop has brought in former Amazon (AMZN) and Google (GOOGL) executive Jenna Owens to support its pivot to digital, but there are not yet any concrete plans about how it will proceed with that aim.
Company executives also shied away from providing near-term profit forecasts in an earnings conference call on Wednesday.
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