GameStop shares fall after it filed to sell securities and says first-quarter sales fell

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GameStop Shares fell 17% in the premarket on Friday after the video game retailer said it planned to sell stock and reported preliminary results that showed sales declined in the first quarter.

The company said it now expects net sales to range between $872 million and $892 million, down from $1.237 billion in the same quarter last year. The traditional video game company faces intense competition from e-commerce-based competitors.

In a separate filing, GameStop indicated its plan to offer securities for an undisclosed amount. The company said it could be a hybrid offering of common shares, preferred shares, depositary shares, warrants, purchase contracts, units and subscription rights that may be convertible into common shares.

The move follows a meteoric rise at the start of the week after the return of “Roaring Kitty,” the man who inspired the epic short squeeze of 2021, sparking a retail trading frenzy. However, the rally lasted only two days, with much smaller net flows to retail traders compared to the trading mania three years ago.