GameStop (GME.US) shares booked more than 15% gains yesterday amid news of a proposed stock split (4:1). The stock split itself will take the form of a dividend, with a receipt date of July 18 and a payout date of July 21. Today, however, the company's pre-session trading shows a significant deterioration in sentiment (the stock's pre-opening valuation is currently down nearly 7%).
Reasons for such a reversal on the company's stock include:
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The firing of the company's current CFO (Mike Recupero)
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The company's downsizing
The struggling video game retailer is making a "series of staff reductions," according to a company memo reviewed by Bloomberg and initially reported by Axios. The cuts will be felt across the parent company and Game Informer, the company's online magazine.
The internal problem at the company is a dissonance between the staff of former e-commerce and classic business employees, Bloomberg reported. The skills involved in running an e-commerce business do not easily translate to the classic business, according to a person familiar with the matter, contributing to confusion and uncertainty around the company's direction.
GameStop (GME.US) stock, H4 interval. News of the dismissal of the company's CFO and job cuts pushed the company's shares nearly 7% lower during pre-opening trading. Source: xStation 5
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