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Source: korobskyph, Shutterstock
GameStop Corporation (GME:US or NYSE: GME), a meme stock, plummeted over 20 per cent at 10:59 AM ET on Wednesday, as the company reported weak fourth-quarter results and stated it is planning to raise fund through its share offerings. The company expects to invest the raised amount in its e-commerce venture.
The share of the video-game company dropped below US$ 144 per piece on Wednesday morning after it registered a profit of US$ 80.5 million or US$1.19 per share in the fourth quarter of fiscal 2020. Its net sales dropped to US$ 5.090 billion in fiscal 2020 against net sales of US$ 6.466 billion in fiscal 2019.
The company has also hired two e-commerce officers, namely Neda Pacifico, Senior Vice President and Ken Suzuki, Vice President, Supply Chain Systems.
Let us look at this Redditors’ favorite stock’s price and financial performances:
GameStop Corporation (GME:US or NYSE: GME)
The gaming stock has zoomed nearly 865 per cent year-to-date (YTD) and all credit goes to the Reddit-fueled rally, which propelled its share price to a 52-week high of US$ 483 per common share on January 28, 2020. Since then, it has plummeted over 62 per cent.
The stock may further drop because of its lower net sales for the ninth straight quarter. Wall Street analysts have already downgraded its target prices.
In the past one year, its share price has swelled approximately 4,269 per cent, with a 50-day trade volume of 51.26 million shares. Now, it is a large-cap stock with a market capitalization of C$ 12.676 billion.
GameStop's One-Year Stock Performance Chart. (Source: Refinitiv)
The company reported total available cash and cash equivalent of US$ 635 million at the end of fiscal 2020, up compared with US$ 513.5 million at the end of fiscal 2019. The company also disclosed its long-term debt and short-term debt of US$ 216 million and US$ 146.7 million, respectively.
GameStop’s Outlook For 2021
During the current year, the video game retailer has been focusing on business transformation. GameStop has not published its guidance for this year due to the COVID-19 impact. However, the company expects to grow its e-commerce operations under the leadership of Ryan Cohen in 2021.
