GameStop Corp. rallied to erase its earnings-driven slide as Reddit’s favorite stocks surged and traders touted the company’s ongoing corporate transformation.
The video game retailer rallied 53% to $ 183.75, picking up all of its $ 4.3 billion drop after quarterly earnings failed to match Wall Street’s. more pressing questions about the company’s turnaround. Dear fellow retailers as a film company AMC Entertainment Holdings Inc. and headphone manufacturer Koss Corp. followed GameStop higher on Thursday.
Shares of Grapevine, Texas-based GameStop have been an example for Reddit-armed retailers looking to band together against short sellers. Thursday’s rally came amid a flurry of trading activity, with more than 49 million shares changing hands, nearly three times the amount traded last week.
The company’s ongoing restructuring, led by activist investor and board member Ryan Cohen, to turn the retailer into a tech heavyweight, has continued to gain traction. The company announced a host of new hires to help it reshape its image and business. on Tuesday, and Cohen has continued to replace his board members with no plans to slow down.
The company has made “significant changes” to its board of directors since June 2020 and expects to “experience additional changes” at its annual meeting this year, GameStop said in a regulatory filing Tuesday, listing eight members who would be leaving.
The retailer reported a quarterly profit that did not reach the average analyst forecast despite expectations for new game consoles to boost sales. Net sales fell 3.3% to $ 2.12 billion in the quarter, below the estimate of $ 2.24 billion, to mark the 12th consecutive quarter of slowdown in sales. The results led to a 34% drop in stocks on Wednesday.
(Updates with closing prices at all times, add profit details in the final paragraph.)