On Monday, GameStop shares had a big fall after CEO Ryan Cohen told investors that the videogame retailer plans to operate a smaller network of stores. He also gave no details on what it plans to do with its cash pile. GameStop CEO Ryan Cohen said during the video game retailer’s annual shareholder meeting it is not here to “hype things up” as meme stock traders continue to invest in the company, which experienced a more than 11% drop after the meeting’s scheduled start time.
Gamestop shares fall
GameStop shares were down 13.4% priced at at $24.86 on Monday afternoon after the annual general shareholder meeting, which lasted about 20 minutes.
Cohen said he anticipates the business will be operated with “a smaller network and more value-added” items as part of the company’s attempt to boost sales and profitability.
He did not say how the company will use its roughly $4 billion in cash, following a share sale that raised more than $2 billion earlier this month.
“We are not here to make promises or hype things up,” Cohen told shareholders. “We’re here to work.”
Gamestop stock meme-mania
Shares of the video game retailer have gyrated wildly over the last month after Keith Gill, the stock influencer known as Roaring Kitty who helped kick off meme-stock mania in 2021, reappeared and later disclosed a large position in GameStop.
Gamestop annual meeting
The initial Gamestop annual meeting scheduled for last week was adjourned due to a technical glitch. This resulted from high demand from shareholders wanting access to the online feed, according to a spokesperson for Computershare, which hosted the online-only gathering.
Gamestop sales
The company has been grappling with slowing sales as its core business of selling new and pre-owned videogame disks takes a hit from consumers’ move to downloading games digitally or streaming.
GameStop raised $933 million by selling shares to cash in on a meme stock rally last month, when the stock doubled in value and an additional $2.14 billion earlier this month.
Gamestop stock
Despite Monday’s drop, Gamestop shares are still up more than 9% in the last month, which has proven to be a volatile one for the stock as it traded as high as $46.55 in early June. Though Gamestop’s shares are down sharply from their May peak and down more than 70% from 2021 intraday highs.
GameStop’s stock frenzy by Keith Gill
GameStop’s stock has been on a volatile run since May, when Keith Gill, who is largely credited as the leader of the company’s meme stock frenzy in 2021, returned to social media after a multi-year hiatus. GameStop shares traded up as high as 110% upon Gill’s return, closing at $48.75. Gill, also known online as Roaring Kitty, recently pulled in more than 600,000 viewers for a livestream about GameStop and his $160 million position in the company. Keith Gill triggered the most recent wave of exuberance among retail investors after he disclosed ownership of 5 million GameStop shares and 120,000 June $20 strike call options in a screen shot posted on Reddit on June 2.
Gill updated his position last week to show he owned about 9 million shares and no options on the company.
