GameStop recently reported a decline in quarterly sales and announced plans to sell up to 75 million shares. This comes as a surprising move just ahead of a much anticipated livestream by meme stock influencer Keith Gill.
GameStop is plunging
The announcement has led to a 20% drop in GameStop’s shares, which fell to $36 before the market opened, making it the most traded stock across US exchanges with over 40 million shares traded.
Keith Gill has played a crucial role in the dramatic rise of GameStop shares in 2021. His announcement of a live stream on YouTube at 12 pm ET had sent GameStop shares soaring by more than 47% in the previous session. However, Its price dropped after the company’s announcement to raise over $3 billion through a share sale.
It is crucial to see that GameStop’s first quarter results showed a decline in net sales as compared to the previous year. This reflects the company’s struggles as customers increasingly turn to e-commerce platforms for purchasing video games and collectibles.
GameStop did not immediately provide further details on its results, which were released four days earlier than scheduled without explanation. Last month, GameStop raised over $900 million by selling 45 million shares.
GameStop saw a 21% rise on June 3 after Gill’s Reddit account posted a screenshot showing a $116 million bet on the stock, featuring a position of 120,000 June 21 call options at a strike price of $20, valued at $65.7 million at last Friday’s close.
Will crypto follow this trend?
Other meme stocks also recorded a decline after the GameStop announcement. AMC Entertainment dropped 8.5%, and headphone maker Koss fell 15.8%, both having recorded double-digit gains in the prior session. This volatility underscores the unpredictable nature of stocks influenced by retail investors and social media-driven trading.
In 2021, Gill’s promotion of GameStop led to a meteoric rise in its shares by as much as 1,600% before a subsequent decline. Gill gained a cult-like following among investors and significant notoriety. His recent activities have added to an increase in GameStop shares, which have risen nearly 150% since May 13. This includes a series of memes posted on an account linked to him.
However, the meme crypto market also recorded a marginal drop over the last day as the biggest of the meme tokens failed to impress the investors.
