GameStop goes out of business after failure to disclose details of firm’s strategy at annual meeting

GameStop The company’s shares fell Monday after the company’s highly anticipated annual meeting failed to provide any concrete updates on the video game retailer’s future plans.

Meme shares ended the session down 12.1% as the company’s rescheduled shareholder meeting ended without detailed comment on its strategy. During the meeting, which lasted about 30 minutes, not a single shareholder was able to ask questions. Shares fell as much as 17% to $23.79.

In a brief opening statement, CEO Ryan Cohen reiterated the company’s plans to focus on cutting costs and increasing profits and hinted that more store closures could be on the horizon.

“Revenues without profits and future cash flow prospects provide no value to shareholders. This means a smaller network of stores with an expanded range of higher-priced products that fit into our trade-in model,” he said.

Cohen did not provide further details about the company’s future growth strategies. He talked about the importance of having a “strong balance sheet” and called it a “strategic advantage,” especially in times of economic uncertainty. As of May 4, GameStop had about $1 billion in cash and cash equivalents on its balance sheet.

“While the future is always uncertain, monetary and fiscal policy over the past decade, both in the United States and around the world, is a historical anomaly. Coming out of an ultra-low interest rate environment is likely to have unintended consequences throughout the economy, as seen in inflation. 40-year high in 2022,” Cohen said.

“At current interest rates, investments made in today’s economic climate should have a higher return threshold,” he added. “As my father always said, actions speak louder than words. We are focused on creating shareholder value over the long term. We’re not here to make promises or hype, we’re here to work.”

The event was cut short due to computer problems and rescheduled to Thursday due to servers crashing due to overwhelming interest in the stream.

GameStop was back in the spotlight when Reddit boss Roaring Kitty, whose legal name is Keith Gill, sparked another trading frenzy. Gill rose to prominence in the online trading space in 2021 by touting his large positions in GameStop, both common stock and risky options. Since returning to the scene, his position has exceeded 9 million shares in GameStop after closing out a giant call option position before expiration.

The stock has risen in seven of the last eight weeks after more than doubling in May. Since the beginning of the year it has grown by about 44%.

GameStop is still trying to pivot to online gaming and away from brick-and-mortar video game purchases, and investors are counting on Cohen to eventually reinvent the company.

The retailer recently raised more than $2 billion in a public stock sale as the video game company took advantage of a renewed meme rally. GameStop said it intends to use the money for general corporate purposes, which could include acquisitions and investments.