GameStop (GME.US) shares plunged nearly 20% after the games retailer said it planned to sell more shares and offered few details about its turnaround strategy. Also news that the SEC is investigating past trading activity is weighing on its stock. Company also hired two former Amazon (AMZN.US) executives to top positions, with Matt Furlong named CEO and Mike Recupero tapped as chief financial officer. However these news together with better than expected quarterly figures failed to stop the decline in share prices. The first meme-stock icons posted a quarterly loss of 45 cents per share while analysts expected a much higher loss of 84 cents per share. Revenue of $1.28 billion beat market estimates of $1.16 billion. Sales rose 25% in the Q1 as the company focuses on e-commerce and tries to stage a turnaround. However GameStop declined to provide an outlook for the year. It said sales momentum continued into the second quarter, with total sales in May increasing about 27% compared with the same month a year ago.
GameStop (GME.US) stock launched today's session with a bearish price gap and is currently approaching the major resistance zone around $219.73 which is strengthened by 50 SMA (green line) and upward trendline. Should break lower occur, then downward move may accelerate towards support at $141.25. However, if buyers manage to halt declines, then another upward impulse towards recent high at $344.02 may be launched. Source: xStation5
