GameStop Shares Drop Over 13% Following Plans to Issue New Stock Amid Revenue Decline

GameStop (NYSE:GME) experienced a significant drop in its stock price, plunging over 13% intra-day today after announcing plans to issue additional shares, despite reporting a decline in revenue for its second fiscal quarter.

The retailer, which became a symbol of the "meme-stock" phenomenon in early 2021, revealed it will issue up to 20 million new shares to raise capital for general corporate needs, including possible acquisitions and investments aligned with its strategy.

For Q2, GameStop posted revenue of $798.3 million, a sharp decrease from $1.16 billion during the same period last year. This decline underscores the ongoing challenges the company faces, particularly with the growing shift toward digital game sales and underperformance in its physical stores.

Despite the revenue drop, GameStop reported a net income of $14.8 million, a notable improvement from the $2.8 million loss it recorded a year earlier. This turnaround was partly driven by reduced operating costs, with lower selling and administrative expenses.

The stock has been highly volatile throughout the year, amplified by the return of Roaring Kitty to X.com in May. Gill played a key role in the 2021 meme stock rally, and his reappearance on social media has reignited some investor interest, though the stock remains subject to unpredictable swings.