GameStop (GME) stock sank more than 20% in pre-market trading on Friday after the company filed to sell 45 million new shares of common stock and released preliminary financial results that revealed sales fell sharply from the year prior in its most recent quarter.
The video game operator said it expects sales to be in a range of $872 million-$892 million in its fiscal first quarter, down from $1.24 billion in the same period a year prior. Wall Street had expected revenue of just over $1 billion for the quarter, according to data from Bloomberg.
With Friday’s pre-market decline, the stock is now below where it opened Monday morning after the reemergence of Keith Gill on X, also known as “Roaring Kitty,” over the wekeend.
Gill’s bull case for GameStop ignited the meme stock rally back in 2021; the stock more than doubled by Tuesday morning.
In its filing, the company noted its stock has been subject to “extreme price fluctuations” disconnected from the businesses’ fundamentals since January 2021, when the meme stock rally first took off.
GameStop added investors buying its stock “may lose a significant portion of their investments” should the price continue to fall.
The filing to sell common stock followed a mixed securities shelf offering filed earlier this morning, which allowed the company to issue common stock, preferred stock, and other securities.
GameStop’s move to sell stock falls in line with an announcement from fellow meme stock play AMC Entertainment (AMC). On Monday, The struggling theater chain raised $250 million of “new equity capital” through the sale of 72.5 million shares on Monday, per an SEC filing.
Shares in AMC have also sold off since its announcement. After rising more than 200% at its peak, AMC has now gained about 50% in the past week.
Josh Schafer is a reporter for Yahoo Finance. Follow him on X @_joshschafer.
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