GameStop (GME) - Get Report shares moved sharply lower Thursday after the video game retailer and meme-stock favorite posted a narrower-than-expected first quarter loss and unveiled plans to sell 5 million shares in order to capitalize on the meteoric that has captured the imagination of Wall Street.
GameStop also named two former Amazon (AMZN) - Get Report executives -- Matt Furlong and Mike Recupero -- as CEO and CFO respectively, while formalizing the appointment of Chewy.com (CHWY) - Get Report founder Ryan Cohen as chairman.
Alongside that, however, GameStop revealed it had received a request from the U.S. Securities and Exchange Commission last month for a "voluntary production of documents" linked to an ongoing investigation concerning "trading activity" in its shares and those of other companies.
The Grapevine, Texas-based retailer posted an adjusted loss of 45 cents per share, well inside the Street consensus forecast, and noted that group revenues rose 27.5% to $1.3 billion, as console demand offset a 5% slump in individual game sales.
The group declined to offer any near-term profit guidance, and didn't take any questions during a brief conference with analysts following the earnings, but repeated plans to sell up to 5 million shares in an "at-the-market" offering, noting it will use the capital for "general corporate purposes" and investing in "growth initiatives".
"We have helped bring stability and strength to the business, including by de-defensifying our store footprint, reducing cost and debt, and returning our company to growth," said outgoing CEO George Sherman. "I also want to take this opportunity to thank our customers for their belief in us and an amazing group of shareholders who have so demonstrably exhibited their support for us. I look forward to working with our newly appointed board and leadership team going forward."
GameStop shares were marked 19.7% lower in mid-day trading Thursday to change hands at $243.00 each. That still leaves the stock with an astonishing 1,190% gain for the year.
Data from the Yolosocks.live website, which tracks real-time mentions on stocks within Reddit's r/wallstreetbets chatroom, indicates that GameStop is the most-discussed stock among users, up from a previous rank of 3, over the past 24 hours and more than 6,765 mentions.
Short interest in the shares remains elevated, however, with data from S3 Partners showing just over $3.04 billion in bets against the group, a figure that represents around 10.86 million shares, or 19.06% of the float.