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posted by Fnord666 on Friday June 11 2021, @01:04AM   Printer-friendly
from the sharp-pointy-lines dept.

GameStop stock falls sharply amid 5M-share sales plan, SEC investigation:

GameStop's quarterly earnings report, released last night, contained relatively good news for the embattled retailer, including a smaller-than-expected operating loss and the company's first year-over-year increase in quarterly revenues in years. But GameStop's heavily inflated stock price is down significantly in morning trading on news that the company plans to sell more shares and the announcement that it is cooperating with a Securities and Exchange Commission investigation into the "meme stock" phenomenon.

In what CEO George Sherman called a "strong start to the year," GameStop's net sales were up over 25 percent to $1.3 billion in the fiscal quarter ending on April 30. That's despite "a roughly 12 percent reduction in the global store fleet due to our strategic de-densification efforts and the continued store closures in Europe during the quarter due to the COVID-19 pandemic."

Previously:
GameStop (The Stock) and GameStop (The Retailer) Continue to be Worlds Apart
GameStop Shares Rise, Fall and Rise Again in Roller-Coaster Day of Trading
The Complete Moron's Guide to GameStop's Stock Roller Coaster


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  • (Score: 3, Interesting) by Anonymous Coward on Friday June 11 2021, @05:55AM

    by Anonymous Coward on Friday June 11 2021, @05:55AM (#1144186)

    The only thing I wonder is, why Gamestop? Why that stock? It must be that they're small enough, and are in bad shape.

    No. It's because WSB noticed that the hedge funds had sold 140% of the existing stock.

    A car analogy.

    Pretend there are only ten 1925 Model T's left in the world. I don't own any, but I sell fourteen of them. WSB notices this and starts buying Model T's. They manage to acquire 6 real ones, leaving 4 out there.

    I now need to buy 14 Model T's to deliver on the sales. The only way I can possibly do that is to buy all the Model T's I can at whatever price I have to pay, deliver them, then buy them back and deliver them again.

    WSB says "We're not selling". The other four are getting traded back and forth frantically trying to cover up the fact that I and my friends only have four. There is no option to cancel the original sales, I HAVE TO buy those 14 model T's, regardless of how high the price goes.

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