GameStop stock plummeted Friday after the video game retailer unexpectedly moved up its Q1 report and announced a new major share offering. The early move erased GME stock's gains from Thursday's rally following the releases. The New York Stock Exchange paused trading on GameStop multiple times throughout the day. Meanwhile, meme trader Keith Gill, known online as Roaring Kitty, was late to his live stream event scheduled for noon on Friday.
Keith Gill on Friday was about 25 minutes late to launch his first is YouTube livestream in over three years. "I'm alive," Gill exclaimed, addressing the chat. The background image of the stream showed a GME chart, while Gill was dressed in a costume of bandages and a splint to poke at the day's losses.
"I want to remind everyone that this is me and I'm the one active on my accounts, of course," Gill said.
He said he maintains much of his views on GameStop from the prior meme rally and reiterated support for CEO Ryan Cohen's management strategy. Gill also pointed to GameStop's improving cash position. GameStop reported ending the quarter with $1.08 billion in cash and equivalents, down from $1.31 billion a year ago.
Gill said he views the company's transformation from its legacy retail business as positive.
"But nobody knows for sure, including me," Gill said, reinforcing that his streams are not financial advice. He added that his thesis may not work out and investors should recognize there is a massive amount of risk. "My aggressive style of investing is almost always not suitable for y'all," Gill said.
He showed a screen of his GME positions on his E-Trade account, which he said are his only positions. Gill also made jokes about E-Trade, in response to reports that the Morgan Stanley-owned platform was considering banning his account. He noted that his holdings were falling hard today, which is part of the risk of his investment thesis.
Gill ended the stream around 1:13 p.m. ET. His overall tone on GameStop stock was positive despite his losses on the day.
The NYSE halted and resumed trading multiple times throughout the livestream.
Elsewhere, Frontier Airlines paused sales at 12 p.m. ET for the live stream, the company announced on its website.
GameStop Earnings, Equity Offering
GameStop reported a loss of 11 cents per share, narrowed from a loss of 17 cents per share the year prior. Net sales tumbled nearly 29% to $881.8 million. FactSet analysts expected a loss of 9 cents per share on $995.3 million in sales.
The company's net loss tightened to $32.3 million vs. $50.5 million last year. The results were in-line with GameStop's preliminary results reported May 17. The retailer at the time guided net sales to range from $872 million to $892 million on a net loss between $27 million to $37 million.
The earnings results came earlier than expected. GameStop on May 30 scheduled its Q1 report for late Tuesday, June 11.
Separately, GameStop announced plans to sell up to 75 million shares of common stock. The company plans to use to the proceeds for general corporate purposes, which may include acquisitions and investments. GameStop also said it previously sold 45 million shares from its May 17 offering, which generated $933.4 million in gross proceeds.
The company in mid-May also filed a shelf registration statement with the SEC. Shelf registrations allow companies to issue more stock to sell at a future date in one more multiple offering rounds.
The filing noted that GameStop's charter allows it to issue up to 1 billion shares of common stock and up to 5 million shares of preferred stock. There were 306.187 million shares of GME common stock outstanding as of May 4.
GameStop said it plans to use the future proceeds from the offering for working capital and general corporate purposes, as well as potentially invest in certificates of deposit (CDs) and U.S. Treasury securities.
GameStop Stock
GameStop stock unraveled 39.33% Friday to close at 28.24. The NYSE halted trading on GameStop stock 17 times on Friday.
Shares surged more than 30% overnight before the earnings-and-offering news.
GME stock on Thursday vaulted 47.5% after Gill scheduled the YouTube event, closing at 46.55.
GameStop shares ended the week up 22%. The stock had doubled on the week through Thursday's close. GME rallied 61.1% this year. Shares had spiked 165% in 2024 prior to Friday's early fall.
You can follow Harrison Miller for more stock news and updates on Twitter @IBD_Harrison
