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GameStop (GME) missed sales expectations in its second-quarter results released after Tuesday's market close. The gaming retailer also announced plans for an "at-the-market" stock offering of up to 20 million shares, sending shares lower in Wednesday's pre-market trading, sliding lower in regular trading hours.
Morning Brief co-hosts Seana Smith and Brad Smith analyze the takeaways of GameStop's earnings contributing to the stock's decline.
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This post was written by Angel Smith
Now time for some of today's trending tickers here. And throughout the day, you can track the best and worst performing stocks of the session with Yahoo Finances trending tickers page. Scan this QR code you see right there below to check out the latest here. First up here on the day, let's check out GameStop. That, yeah, GME sinking right now by about 11% today after reporting sales that missed estimates and fell more than 30% in the prior quarter. The company also disclosed an at-the-market stock offering of up to 20 million shares. Uh so focusing in on the ladder first, typically, this is the type of reaction that you would see in the stock when there is an at-the-market equity offering because that just means there's a further dilution of shares that are already in the market here. But then, looking into some of the fourth quarter, well, actually, not the fourth quarter, but the quarter results here, one of the huge things going forward from this juncture is just trying to figure out exactly how they're going to continue to move through a lot of the inventory that they have, net sales. Uh they were down and and not even close to what the prior year second quarter was. 1.164 billion dollars last year, same quarter. This year, 798 million dollars.
Yeah, certainly. I think when when you see a drop like this, not necessarily a huge surprise. We talked about the fact that many times the stock trading unrelated to fundamentals. Although it looks like when you take a look at the stock's reaction here today, you can see how far and even further, many many analysts, some of the analysts, few analysts that still cover GameStop would argue that GameStop is still trading well above where it should be on a fundamental basis. But again, share sliding on the disappointing report. Bear saying that the results demonstrate the ongoing quote-unquote challenges to the company's retail business model. Also went on to say that they also have limited confidence in GameStop's ability to restore growth and improve profitability. Not exactly too new of a too different of an opinion that we've heard from some of these analysts over the last couple of quarters.