GameStop (NYSE:GME) shares tumbled Friday after the video game retailer said it plans to sell additional shares and reported preliminary results that showed a sales decline in the first quarter.
In a new regulatory filing, the firm said it’s selling up to 45 million class A common shares in an at-the-market offering. The offering comes after GameStop’s stock surged earlier this week in a brief revival of the meme stock trade.
Meanwhile, in a separate statement, GameStop said it now expects net sales to be in the range of $872 million to $892 million, down from compared to $1.237 billion in the same quarter last year. Two analysts polled by FactSet expected first quarter revenue of around $1 billion.
Net loss is expected to be in the range of $27 million to $37 million, compared to a net loss of $50.5 million in the prior year fiscal quarter. The brick-and-mortar video game company has been grappling with stiff competition from e-commerce-based competitors. In late March, GameStop announced an unspecified number of job cuts to reduce costs.
The rally in GameStop this week appeared to be fueled in part by posts on X from the long dormant account of Roaring Kitty, aka Keith Gill, one of the key figures in the 2021 meme stock mania. GameStop hit a high of $64.83 per share on Tuesday, up more than 200% since its closing level last Friday.
GME shares withered $7.91, or 28.6%, to $19.76.