What Happened?
Shares of video game retailer GameStop (NYSE: GME) fell 19.4% in the morning session after the company announced plans to offer $1.75 billion in Convertible Senior Notes due in 2032 to qualified institutional buyers. The stock is likely down due to concerns about the dilutive effect of the notes, which can be converted to the company's ordinary stock, raising the total share count.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy GameStop? Access our full analysis report here, it’s free.
What The Market Is Telling Us
GameStop’s shares are extremely volatile and have had 44 moves greater than 5% over the last year. But moves this big are rare even for GameStop and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was about 20 hours ago when the stock dropped 5.2% on the news that the company reported underwhelming first-quarter 2025 results. Sales missed expectations, down a whopping 17%, signaling persistently soft demand for its core offerings. The miss was driven by shrinking sales in hardware and software, wiping out gains in the collectibles business that grew to nearly 30% of total sales.
On the other hand, GameStop blew past analysts' gross margin and EPS expectations, and it generated positive free cash flow. It also purchased 4,710 Bitcoins between May 3, 2025 and June 10, 2025. Overall, this was a mixed yet weaker quarter, highlighting persistent sales issues.
GameStop is down 27% since the beginning of the year, and at $22.38 per share, it is trading 36.1% below its 52-week high of $35.01 from May 2025. Investors who bought $1,000 worth of GameStop’s shares 5 years ago would now be looking at an investment worth $18,966.
Do you want to know what moves the business you care about? Add them to your StockStory watchlist and every time a stock significantly moves, we provide you with a timely explanation straight to your inbox. It’s free and will only take you a second.
