GameStop reports wider loss amid lack of news on strategy
BNN Bloomberg
GameStop reported a Q3 loss that was wider than analysts’ expected, while investors await word about how the struggling retailer intends to reshape its operations and lure gamers back. Shares fell in extended trading.
GameStop Corp. reported a fiscal third-quarter loss that was wider than analysts’ expected, while investors await word about how the struggling retailer intends to reshape its operations and lure gamers back. The shares fell in extended trading.
Separately, GameStop said it received a subpoena in August from the Securities and Exchange Commission asking for documents, following up on an initial request in May regarding an investigation by the agency into the trading activity of GameStop’s securities and those of other companies. GameStop said in a filing that the inquiry isn’t expected to adversely affect the company.
Once an overlooked mid-size company whose prospects had seen better days, before gaming shifted to digital downloads from physical cartridges, GameStop became the poster child for the meme stock movement. It has been championed this year by retail investors who organize in online forums like Reddit and have boosted the stock by more than 800 per cent.
There is little fundamental reason behind the move and investors been waiting to hear more from Ryan Cohen, the co-founder of pet supply company Chewy Inc. who joined the board earlier this year with a vision to turn GameStop into a competitor of Amazon.com Inc.
Cohen, an activist investor and major shareholder, has outlined a strategy for GameStop to face off more directly with the world’s most valuable online retailer with a broader array of digital products and services, and plans to invest in e-commerce fulfillment and customer care efforts. GameStop appointed Matt Furlong, a former Amazon executive, as chief executive officer in June.
But Cohen has said very little since he was elected chairman six months ago and announced that he was “putting the right pieces in place.” There have been a few cryptic tweets, but during the last three earnings calls, in March, June and September, the GameStop team took no questions.
