Traders work on the post where GameStop is traded on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., June 12, 2024.
Brendan McDermid | Reuters
GameStop Shares fell on Monday after the company's highly anticipated annual meeting offered no concrete news on the video game retailer's future plans.
The meme stock ended the session down 12.1% as the company's postponed shareholder event concluded without detailed remarks on its strategies. No shareholder came forward to ask a question during the roughly 30-minute meeting. Shares lost as much as 17% to close at $23.79.
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In brief introductory remarks, CEO Ryan Cohen reiterated the company's plans to focus on cutting costs and increasing profits and hinted that more store closures may be on the horizon.
“Sales without profits and prospects for future cash flows are worthless to shareholders. That means a smaller store network with an expanded range of higher-value items that fit into our trade-in model,” he said.
Cohen did not elaborate on the company's future growth strategies. He spoke about the importance of a “strong balance sheet,” calling it a “strategic advantage” – especially in times of economic uncertainty. As of May 4, GameStop had about $1 billion in cash and cash equivalents on its balance sheet.
“While the future is always uncertain, the monetary and fiscal policies of the past decade, both in the U.S. and globally, are historic anomalies. Exiting an environment of ultra-low interest rates is likely to have unforeseen effects across the economy, as evidenced by inflation, which will reach a 40-year high in 2022,” Cohen said.
“With current interest rates, an investment in today's economic climate needs to have a higher threshold for return,” he added. “As my father always said, actions speak louder than words. We are focused on creating value for our shareholders over the long term. We are not here to make promises or hype things up, we are here to work.”
The event was interrupted by computer problems and postponed on Thursday as servers crashed due to overwhelming interest in the stream.
GameStop once again came into the spotlight when Reddit leader Roaring Kitty, whose real name is Keith Gill, sparked another trading frenzy. Gill rose to notoriety in online trading in 2021 for touting his large positions in GameStop, both in common stock and risky options. Since resurfacing, his position has surpassed 9 million GameStop shares after he unwound a gigantic call option position before expiration.
The stock has gained in seven of the last eight weeks after more than doubling in May. It is up about 44% year-to-date.
GameStop is still struggling with its transition from brick-and-mortar video game stores to online gaming, and investors are betting that Cohen will one day reinvent the company.
The retailer recently raised more than $2 billion in a stock sale at the market as the video game company capitalized on the revived meme rally. GameStop said it intends to use the money for general corporate purposes, which could include acquisitions and investments.