GameStop shares slump after retailer discloses SEC subpoena and misses earnings estimates
- GameStop shares fell as much as 7% Thursday after the company reported an earnings miss.
- In its earnings report, the video-game retailer said it received a subpoena from US regulators.
GameStop shares slumped more than 6% Thursday after the video-game retailer said it received a subpoena from the US Securities and Exchange Commission and posted an earnings miss for the third quarter.
Shares of the company were trading at $162.86, down 6.2%, as of 11:58 a.m. ET Thursday.
In a regulatory filing, the company said on August 25 the SEC issued a subpoena asking for additional documents related to an investigation launched earlier this year regarding trading activity of the company.
"We are in the process of producing the documents and have been and intend to continue cooperating fully with the SEC Staff regarding this matter. This inquiry is not expected to adversely impact us," the company said in its filing. GameStop did not immediately respond to Insider's request for further comment.
In its third-quarter results posted Wednesday, GameStop reported a $1.39 loss per share. That was a miss compared with the $0.52 loss-per-share predicted, Reuters reported, citing Refinitiv data.
"Our focus on the long term means we will continuously prioritize growth and market leadership over short-term margins," said Matt Furlong, according to a transcript of the earnings call from the Motley Fool. Furlong joined GameStop this year as the chief executive officer after his time working at Amazon.
Despite the net earnings loss, GameStop posted sales of $1.3 billion, beating the $1.19 billion estimate, Reuters reported.
Shares fell as much as 7.7% to $160.41 Thursday. Despite the slump, GameStop has jumped 851% so far this year, boosted by the army of retail traders on social media sites like Reddit who have backed the company and turned it into a meme stock.