GameStop Stock Reacts to Quarterly Financial Report
GameStop stock is still high but dropping fast after the latest quarterly earnings report showed a revenue decline.
GameStop (GME) is the hot meme stock to invest in still, after spiking in early May, but the company reported poor earnings in its quarterly report.
Almost in line with analyst expectations, GameStop reported that it had lost $32.2 million for the quarter from revenue around $882 million. That is a considerable decline from last year’s $1.2 billion in revenue. However, GameStop was losing $50 million on that revenue due to its extensive spending on products, wages, and operating expenses.
The stock fell as a result, dropping 26% in Friday’s trading session. That is one of the most significant declines in a single day for the stock since it started to surge. GME has been elevated for over a month now, far above where it was at the beginning of May when its stock was priced around $11 a share.
GameStop’s Recent Surge
The upswing happened when investor Keith Gill, known by the moniker Roaring Kitty, resurfaced on social media after having been silent for years. He was responsible for getting investors fired up about GME stock in 2021 as well. He has been actively posting about the stock since May of 2024 and spurring frenzied trading activity.
He recently held a livestream to let his followers see him become a billionaire in real-time off of GameStop stock. That expected win for him has not gone how he expected, though, as GameStop posted their quarterly earnings on Friday. The company’s severe losses have caused the stock to decline.
Is GameStop Still a Good Investment?
GameStop has been a risky investment even before the price spike last month. Trading on this stock has become so volatile now that some trading platforms have limited or banned trades on the stock.
After the most recent earnings report, it looks like GameStop is headed for a serious decline. The stock is still elevated, at $37.93, but the company does not have the revenue to back up the share price.
We do expect the stock to fall very soon. Though social media efforts can help keep it high for a while and even instigate another boost, we may not see either of these happen. The steam could be running out on this meme stock, as often happens after a few weeks of elevated market activity.
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