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GameStop swung to a loss in the latest quarter, with an 11% decline in sales.
Scott Olson/Getty Images
GameStop
shares were rebounding Monday after two directors disclosed stock purchases in the wake of last week’s skid.
Director Larry Cheng’s Cheng Capital paid $111,900 for 5,000 GameStop shares (ticker: GME) at an average price of $22.38 a share on Friday, according to a Monday filing with the Securities and Exchange Commission. That followed a Friday evening disclosure from Director Alan Attal, who paid $224,000 on Friday for 10,000 GameStop shares at an average price of $22.40.
GameStop stock was up 5.5% to $23.92 in Monday morning trading. Shares sank about 18% on Thursday, the day after the firm disclosed disappointing results and the firing of CEO Matt Furlong. The board named Ryan Cohen as executive chair and Mark H. Robinson as general manager and principal executive officer.
Both Cheng and Attal are associates of Cohen from his time as
Chewy
‘s co-founder. Attal served as Chewy’s chief operating officer from 2011 to 2017 and chief marketing officer from 2017 to 2018. Cheng’s Volition Capital was Chewy’s first investor.
GameStop didn’t respond to a request to make the directors available for comment on their purchases.
Cohen revealed a stake in GameStop in 2020, calling on the firm to invest more in e-commerce. That news—a signal that a well known tech investor would be pushing to turn the company around—along with the stock’s sky-high short interest at the time, attracted the attention of some bullish users on Reddit’s WallStreetBets forum. Attal joined the GameStop board with Cohen and Jim Grube in January 2021, which helped kick off a parabolic run for GameStop stock.
Excitement about the stock and efforts to squeeze short sellers spread beyond Reddit to other social media sites such as Twitter and TikTok. Cheng joined the board later that year, when Cohen became chairman.
GameStop is often referred to as a “meme stock” because it still has a large base of retail investors betting on the shares who congregate and swap memes in online spaces. Other meme-stock qualities include volatility in response to headlines, elevated short interest, and a belief among analysts that the retail investors are ignoring the business’s fundamentals. GameStop shares have traded between $15.41 and $47.99 in the past year.
GameStop reported a quarterly profit in its fiscal fourth quarter, the three months through Jan. 28, but swung back to a loss of $50.5 million in the following quarter. Sales fell 11% year over year to $1.24 billion.
Write to Connor Smith at [email protected]
Source: https://www.barrons.com/articles/gamestop-stock-directors-bought-shares-41ea9ad?siteid=yhoof2&yptr=yahoo