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GameStop (GME) Stock Fell 11% After Reporting Worse than Expected Loss

GameStop Corp stock dropped as much as 11% during the extended trading session to trade around $181.40. The sudden dip has been attributed to financial results for the second quarter of 2021 that saw a worse than expected loss. Meme-stock fans were left wondering after GameStop’s new CEO declined to take questions from analysts.

However, GME stock has been on a winning streak for the past year as the gains have surpassed the recent dips. According to market analytics provided by MarketWatch, GameStop stock has added approximately 3,091%, and 955% in the past year and YTD respectively through Wednesday. 

Since hitting its all-time high around $483 at the beginning of the year, GME stock has traded sideways to date. On the weekly timeframe, GME stock has formed a perfect ascending triangle that occurs when there is a resistance level and a slope of higher lows. In simpler terms, there is a level that buyers are not able to exceed so far. However, the buyers are gradually starting to push the price up as evidenced by the higher lows. Thereby, an imminent breakout remains underway should the fundamentals support speculative trading.

GameStop (GME) Stock and Company’s Future Perspective

With the new CEO Matt Furlong, GameStop is focused on delivering exceptional products and also sustainable stock market growth. “We now have unified leadership fully focused on two long-term goals: delighting customers and delivering value for stockholders,” Furlong said on the call, echoing remarks from Chairman Ryan Cohen in June. “In addition to focusing on long-term opportunities, we took a number of steps over the past quarter to fortify the company’s infrastructure and technology. We are focused on positioning GameStop to scale while obsessing over competitive pricing, expansive selection, and fast shipping.”

According to the second-quarter earnings results, GameStop generated net sales of $1.183 billion, compared to $942 million in the prior year’s second quarter. Additionally, the company closed the second quarter with cash and restricted cash of $1.78 billion.

Worth noting, the company closed the second quarter with no long-term debt. However, GameStop remains indebted $47.5 million to the French government accrued during the pandemic.

The company has identified several competitive measures to work on and remain relevant in the entertainment industry. Among them, the company invested in long-term initiatives including product catalog, the addition of new talents among others.

Additionally, the company entered into a lease of a new 530,000 square-foot fulfillment center in Reno, Nevada. During the second quarter, GameStop also entered into a lease of a new customer care center in Pembroke Pines, Florida.

Source: Coinspeaker