GME: GameStop Stock Sinks 15% Out of the Gate as Traders React to Weak Earnings

Retail traders’ favorite meme stock took a dive in early morning Wednesday and is now down more than 20% for the year.

Key Points:

• GameStop picked up $1.79B in sales.
• Stock crashed more than 15% at open.
• Earnings slipped way below estimates.
• GameStop stock GME dipped more than 15% to trade below $13 a share in the first Thursday deals after the videogame retailer posted disappointing earnings after market close on Wednesday. The company’s shares are now showing a loss of about 20% for the year and roughly a 50% decline in the past twelve months. Are the crazy meme stock days in the rearview mirror?
• Regardless of how much you like the stock, fundamentals matter, too. For the quarter ended in January, GameStop pocketed $1.79 billion in revenue, sliding below consensus for $2.05 billion. Earnings were an even bigger miss. The retail traders’ darling earned 22 cents a share, or more than 26% below Wall Street’s views for profits of 30 cents a share.
• The company’s core business—physical console games—showed a sizable drop. Hardware and accessories sales punched out at $1.09 billion, down from $1.24 billion. Software sales marked a steep 31% decline to $465 million from $670 million a year ago.