GameStop | $GME Stock | Shares Get Sold Off After Earnings Report


GameStop Corp. (NYSE: GME)

Chances are if you have ever played a video game of any kind you likely know the name GameStop. The company which has 7400 stores spread thruout 14 countries worldwide and employees 23000 men and women announced their earnings on Thursday August 24th, 2017 for their fiscal second quarter.

Earnings came in at $0.22 per share compared to $0.27 per share in the same quarter of last year. After adjustments in the earnings for one time events and/or items-, earnings came in at $0.15 per share and analysts were expecting $0.18 per share.

So even though quarterly sales rows to 1.69 billion from 1.63 billion a year ago, and same-store sales increased almost 2%, this was not enough to satisfy investors, analysts, and traders.

Shares sold heavily in the after market trading session- closing down 7.44% at $20.16. Shares had closed the regular session up $0.30 at $21.78.

Shares have traded in a 52-week Range from a low of $20.10 to a high of $32.41. The company pays out a hefty dividend of 6 point 9 8 percent annually.

Company Comments

Paul Raines, chief executive officer, had this to say to investors after the earnings were announced:

“Our second quarter sales results were driven by continued strong demand for Nintendo Switch and Collectibles. Looking at the second half of 2017, the Nintendo Switch, the launch of Microsoft’s Xbox One X, and a solid slate of AAA titles should drive growth in the video game category. In addition, we expect that our Technology Brands AT&T Wireless business will benefit from a boost in consumer demand driven by the launch of innovative new mobile handsets, including Apple’s next-generation iPhone.”

GameStop Charts

The above price chart shows the intraday trading session on the left and the after hour trading session on the right. It is easy to see just when the earnings were announced and shares began the descent from the selling pressure.

The above price chart shows GameStop’s daily trading action for the prior three months up until today. It is easy to see the red horizontal resistance line and the green horizontal support line that price has basically respected.

However after the earnings were announced on Thursday shares were likely open lower in the red oval area on the lower right. Given the high short interest of the common shares, it will be interesting to see how the price closes on Friday with many people already short the stock that had bet it would go lower.

Company Profile

GameStop Corp. operates as an omnichannel video game retailer. It sells new and pre-owned video game hardware; video game software; pre-owned and value video game products; video game accessories, such as controllers, gaming headsets, virtual reality products, memory cards, and other add-ons; and digital products, including downloadable content, network points cards, prepaid digital and subscription cards, and digitally downloadable software.

The company also sells mobile and consumer electronics, including wireless products and services, and accessories, as well as new and pre-owned smart phones; personal computer (PC) entertainment software in various genres, including sports, action, strategy, adventure/role playing, and simulation; and strategy guides, magazines, and interactive game figures.

In addition, it offers collectibles that include licensed merchandise related to the video game, television, and movie industries, as well as pop culture themes; and operates electronic commerce Websites under the GameStop, EB Games, Micromania, and ThinkGeek brand names.

Further, the company operates, a browser-based game site; Game Informer magazine, a print and digital video game publication; iOS and Android mobile applications; Simply Mac, a certified Apple consumer electronic products reseller, as well as offers certified training, warranty, and repair services; and Spring Mobile, an authorized AT&T reseller operating AT&T branded wireless retail stores, as well as pre-paid wireless stores under the Cricket Wireless name that offers prepaid services, wireless devices, and accessories.

As of January 28, 2017, it operated approximately 7,535 stores in the United States, Australia, Canada, and Europe. GameStop Corp. primarily offers its products through stores under the GameStop, EB Games, and Micromania names. The company was formerly known as GSC Holdings Corp. GameStop Corp. was founded in 1994 and is based in Grapevine, Texas-YahooFinance