GameStop does not meet market expectations and sinks more than 30%: the reasons for the fall

GameStop falls again after releasing preliminary first-quarter numbers and filing to potentially sell securities. It should be remembered that the shares of the video game retailer GameStop they shot up almost 75% on Mondayafter what Roaring Kitty a former insurance company salesman credited with starting an unexpected stock market rally in 2021, returned to platform X after three years of absence from social networks.

Thus, before the market opened, GameStop shares dropped sharply by -30% after announcing the preliminary results for the first quarter. The balance is positive, meanwhile, during the last five days, as the stock exceeds US$27 after climbing more than 50% in the last week.

The retailer said it expects to report net sales in the range of $872 million to $892 million, compared with the consensus expectation of $1.05 billion and last year’s figure of $1.237 billion. SG&A expenses are expected to be in the range of $290 million to $300 million, compared to $345.7 million last year. GameStop (GME) forecasts a net loss in the range of $27 million to $37 million for the quarter. At the end of the quarter, GameStop’s (GME) cash position was in the range of $1.073 billion to $1.093 billion.

GameStop (GME) has also filed a mixed securities registration with the SEC, giving it the right to sell a mix of securities more quickly in the future. The amount of the offer was not disclosed, although that may be quite typical with that type of presentation.

GameStop (GME) shares fell 10.5% in pre-market trading on Friday, adding to Thursday’s 30% drop. The stock is still up about 45% since volume started picking up in late April.

Another factor to take into account

Meme stock fans want to know: Was Keith Gill really responsible for the torrent of tweets that caused GameStop stock to surge more than 100% this week? Reddit users have been speculating and debating the question since Gill’s account @TheRoaringKitty X made its first post in three years on Sunday.

Questions about who exactly had been posting on the account were intensified by the fact that Gill has not made any posts to his other two social media accounts on Reddit and YouTube, as well as the fact that the 58 tweets that have gone out by @TheRoaringKitty from Sunday are mostly compilations of movie scenes edited together.

If a message is being sent to the meme stock faithful, it’s pretty inscrutable. Reddit users wondered why Gill himself didn’t make an appearance, like he did during the boom times of 2020-2021 when he posted videos of himself discussing why he liked GameStop.

But the real suspicion about who is behind the @TheRoaringKitty blow up a Lamborghini and spread a rumor that Google was shutting down Gmail earlier this year.

In the screenshot, Gill responded to the message, saying “If you’re seriously interested, then yes, I would potentially consider an offer,” followed by his email address. Polymarketa website that allows users to bet on the outcome of cryptocurrency events, responded to @SCHL0MS’ tweet by saying that it “can confirm” that the transaction occurred and that it helped facilitate the sale of Gill’s X account.

But screenshots can be easily altered, and @SCHL0MS has a history of concept art designed to fool the internet. Business Insider cannot confirm the validity of what was published on X.

“The theory that he sold his account makes as much sense as any other at this point, but I’ll need much stronger evidence before I believe it,” one Reddit user said in response to the question.

Polymarket told Business Insider that the @SCHL0MS account “has been an experiment conducted by Polymarket together with the Remilia Corporation. I cannot comment further on who currently owns @TheRoaringKitty.” Remilia Corporation is a decentralized autonomous organization and art collective.