GameStop released its first earnings report on Tuesday since it became the subject of international attention during a Reddit-fueled buying rally and named former Amazon and Google executive Jenna Owens as its new chief operating officer. .
The company’s sales and profit figures were slightly lower than analysts had expected and its shares, which had fallen 6.5% during the day, briefly rose 8% in after-hours trading before falling more than 15%.
In the fourth quarter of 2020, GameStop’s net sales were $ 2.12 billion, compared to $ 2.19 billion in the fiscal fourth quarter of 2019. Net profit was $ 80.5 million, both numbers below analysts’ forecasts.
Between December and the end of January, the shares of the troubled video game retailer rose 1,700%, with an army of small investors that gathered around the Reddit forum, WallStreetBets, accumulating in the company.
Investors bet that Wall Street investors outdid themselves by betting that the stock price would collapse and that their declining fortune would change after Ryan Cohen – founder of Chewy, the online pet supply store – bought a stake in company and joined the board.
The extraordinary rise in prices for GameStop and other so-called meme stocks has led to Congressional investigations into the markets and the Robinhood trading app.
Shares that had fallen by $ 13 in December peaked at $ 347 on January 27, before collapsing again in February and rising again in March. On Tuesday, GameStop told investors that the share price was at $ 181, valuing the company at $ 12.7 billion.
Prior to the launch, GameStop announced that its customer service director, Frank Hamlin, was stepping down, the latest in a series of exits since Cohen joined the board.
After the earnings conference call ended early, without the usual question and answer session by Chief Executive George Sherman, some on Reddit complained about the lackluster conference call. “Yes, that call was terrible. No questions ?? After the most volatile thing we’ve seen in the stock market … maybe never? That was disheartening, ”wrote a Redditor.
“Guys relax, nothing has changed after this report. We knew that nothing has changed. Just relax, ”posted another.