Shares of GameStop (NYSE: GME) tumbled 20% intraday Wednesday after its sales and earnings fell short of expectations for the fiscal 2020 fourth quarter.
The video game retailer posted sales that slipped to $2.12 billion for the 13 weeks ending Jan. 30, down from $2.19 billion in the same period of the preceding year. On an adjusted basis, GameStop earned $90.7 million, or $1.34 per share. Analysts polled by FactSet were looking for sales of $2.21 billion on adjusted earnings of $1.35.
GameStop attributed the sales dip to its store closures as a result of the coronavirus pandemic.
“While everyone was expecting big news about some massive digital transformation in the mold of the new tech-oriented board members, nothing was said,” wrote Joseph Feldman of Telsey Advisory Group.
Expect shares of GameStop to continue sliding, as many Americans have received their stimulus checks now. Some of those are retail investors involved in the GameStop short squeeze, an approach used to punish hedge funds by driving the stock price higher.
Meanwhile, 10 Democratic lawmakers wrote President Joe Biden a letter earlier this month, urging him to include more stimulus money in the next spending bill. Right now, it’s unclear when that would pass but let the stock continue to fall and potentially buy it back around the summer to gear up for the next possible short squeeze rally on GameStop.