Keith Gill, the Reddit user who inspired the GameStop rally, during a YouTube livestream hosted on a laptop at the New York Stock Exchange on June 7, 2024.
Michael Nagle | Bloomberg | Getty Images
GameStop Shares fell more than 16% Monday as meme stocks extended Friday’s selloff, fueled by a dismal earnings report and a lackluster Roaring Kitty livestream.
Shares of the video game company fell to just under $24 a share on Monday after falling nearly 40% on Friday alone. GameStop released its earnings report days ahead of schedule, reporting that sales fell 29% in the first quarter. GameStop also announced the sale of another 75 million shares.
Meanwhile, meme champion Keith Gill held his first livestream in several years on Friday. He said he had no institutional backing and his only bet was the GameStop position, which he shared in screenshots. Gill also repeated his previous investment thesis and offered no new arguments for his large stake.
Michael Pachter, a GameStop analyst at Wedbush, said he remains skeptical the company can make any meaningful turnaround after several failed strategies lately.
“We don’t see how GameStop can add value by running any new business, especially now that its entire executive team has either been fired or decided to leave,” he said in a note.
Pachter noted that GameStop’s previous Amazon-like strategy was a “total failure” as three former Amazon executives the company hired to implement the strategy left the company. Then his plan to sell NFTs fell apart. after he became a partner with the now-defunct FTX, he added.
The analyst believes that any support GameStop received from Gill may be short-lived.
“We suspect that [Friday’s] livestream from influencer Keith Gill (Growling Kitty) will keep shares rising long enough for the company to complete [at-the-market share offering]“But without a clear strategy, we suspect the share price will start to decline again and move closer to our new target price,” Pachter said.