GameStop Corp.’s stock fell 23.1% in morning trading Friday, after the videogame retailer and key meme stock issued a profit and sales warning for the first quarter and also filed to sell more shares.
Grapevine, Texas-based GameStop said it expects its first-quarter net loss to range from $27 million to $37 million, narrower than the loss of $50.5 million posted in the year-earlier quarter. The company’s first quarter ended May 4.
Sales are expected to range from $872 million to $892 million, down from $1.237 billion a year ago.
The FactSet consensus is for a loss of $28 million and sales of $1.045 billion.
Separately, the company filed a shelf registration to offer up to 1 billion new shares of Class A common stock and 5 million preferrred shares. It also said it has entered an open market sales agreement with Jefferies LLC to sell up to 45 million shares of common stock.
The company said it expects selling, general and administrative costs to range from $290 million to $300 million, down from $345.7 million a year ago.
It expects to end the quarter with cash of $1.073 billion to $1.093 billion, down from $1.310 billion a year ago.
The stock has just suffered its worst two-day stretch since 2021 after ending Thursday’s session down 30%. The stock is down 43.2% over the past two trading sessions, marking its biggest two-day decline since it fell almost 41% over the two sessions ending Feb. 4, 2021, Dow Jones Market Data show.
However, it’s still up 58% on the week after rallying on Monday and Tuesday as the meme-stock craze from 2021 was revived when trader Keith Gill, aka Roaring Kitty, posted on his long-dormant X (formerly Twitter) account.
Fellow original meme stock AMC Entertainment Holdings Inc. has seen a similar trading pattern this week, skyrocketing on Monday and Tuesday before turning down.
AMC was last down 5%. The S&P 500 has gained 1.4% on the week.