Wall Street desperately wanted details on GameStop’s game plan. But when investors didn’t get it, they drove the shares down sharply in early trading Thursday. Even a 25% jump in quarterly sales couldn’t excite them.
What disappointed investors was the company’s silence about its turnaround plan. Wall Street wanted to know how the company planned to refashion itself into a game and entertainment retailer and how chairman Ryan Cohen would focus the company on e-commerce and breathe new life into its physical stores. After all, the company had been able to raise more than $1 billion in new equity partly to fund its reorganization plan.
It was able to raise funds amid the frenzied demand for GameStop shares this year that had small-time traders on Robinhood bidding the stock north of $480 in January from just $18 in December. Fueled by social media posts on Reddit, those traders battled Wall Street hedge funds who had bet the shares would fall.
But to the dismay of traders, GameStop did not provide a financial forecast in its short earnings conference call Wednesday.
Its shares fell 10% in early trading Thursday to $178. But they’re still nearly 10 times what they commanded nine months ago.