GameStop Shares Plunge in After-Hours Trading

On Tuesday, shares of GameStop plunged in the extended sessions as soon as the company reported its Q4 results, and announced that the company was no longer for sale. The largest retailer of video games and consoles globally said it won’t issue annual earnings guidance at this time.

Shares of GameStop fell by 8.51 percent during after-hours trading. The stock crashed to $9.36 from $10.25, just minutes after it ended the trading day at $10.10.

Q4 sales of the company fell 7.6 percent year over year to $3.1 billion, and reported net losses of $187.7 million, or $1.84 a share, compared to $105.9 million, or $1.04 a share, in the previous year. Earnings were $1.60 a share versus $2.02 in the year-ago quarter, and revenue fell to $3.06 billion from $3.32 billion.

The EPS of the stock is at $-5.78 and has a reported 52-week high/low of $17.27 and $10.04, respectively.

"This past year was a pivotal one for GameStop capped by retail industry veteran George Sherman's appointment as chief executive officer," said GameStop Chairman Dan DeMatteo.

The company warned a potential first-quarter loss prior to the events of the drop and is expecting sales to decline by five to ten percent for the current year.

"As we think about 2019 and beyond, we recognize the challenges facing our pre-owned video game business and are prepared to address them as we continue to evolve our business model going forward,” said GameStop Chief Operating Officer Rob Lloyd.

The gaming retail giant is facing the troubles of keeping up with a fast-changing industry as consumers are now relying more on online purchases rather than visiting brick-and-mortar stores.

Tech companies Apple and Google have also announced their online streaming services for video games in the previous month, which means additional hurdles and competition for GameStop.

GameStop now aims to achieve $100 million for its operating profit in 2019. It also partnered with Hestia Capital Partners and Permit Capital Enterprise Fund, two activist firms, and would-be new independent investors to the company’s board.

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