GameStop stock falls 20% (NYSE: GME) reported a much larger-than-expected revenue miss for the fiscal first quarter of 2024.
GameStop Stock Falls
In addition to the revenue miss, the company announced plans to sell up to 75 million shares, causing its stock to drop nearly 20% in premarket trading on Friday.
Keith Gill’s Return Boosts Stock
Prior to the announcement, GME stock had surged as much as 37% after retail investor Keith Gill, known online as “Roaring Kitty,” announced his return to YouTube after a three-year hiatus. This news had fueled a 47% surge in the stock on Thursday.
Q1 Financial Performance
For the first quarter, GameStop reported a loss per share of $0.11, which was worse than the $0.09 loss per share expected by analysts. The company posted revenues of $882 million, significantly below the consensus estimate of $995 million.
Despite the revenue miss, GameStop’s net loss for the quarter was $32.3 million, an improvement from the $50.5 million net loss in the same period last year.
The Impact of Roaring Kitty
Keith Gill, better known as Roaring Kitty, is renowned for his GameStop stock analyses on the subreddit r/wallstreetbets. Posting under the username DeepF******Value (DFV) on Reddit, his insights played a pivotal role in the January 2021 GameStop short squeeze and the ensuing meme stock trading frenzy.
Use of Proceeds from Share Sale
GameStop stated that it intends to use the proceeds from the planned share sale for general corporate purposes.
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