May 17 (UPI) — GameStop stock declined Friday, following a broader “meme stock” rally earlier in the week, as it announced plans to sell securities and reported declining first quarter sales.
Shares of GameStop were down 26% about an hour after markets opened Friday.
The decline came after GameStop said in a Securities and Exchange Commission filing Friday it would sell up to 45 million Class A common shares.
In a quarterly earnings report, the video game retailer said cash, cash equivalents and marketable securities “are expected to be in the range of $1.073 billion to $1.093 billion, compared to $1.310 billion at the close of the prior year fiscal quarter.”
In the same report, GameStop said its net loss in the first quarter is expected to range from $27 million to $37 million.
GameStop said that for the 13 weeks ended May 4, net sales were expected to be within a range of $0.872 billion to $0.892 billion compared with $1.237 billion in the previous year’s first quarter.
The company’s net loss in the prior year’s first quarter was $50.5 million.
The net loss news and plans to sell stock as its share prices drop followed a rally earlier this week as GameStop shares reached a high point of $64.83 a share, an increase of over 200% from its closing price May 10.
That artificial bump appeared to be at least partially driven by posts on X from Keith Gill, known online as “Roaring Kitty,” one of the key people in the 2021 meme stock episode that sent GameStop stock prices soaring.
GameStop cut jobs in March.
And in June of 2023 the company fired CEO Matthew Furlong less than a year after it had replaced its Chief Financial Officer in another round of layoffs.