Why GameStop Stock Fell 29% Last Month
Shares of video game retailer GameStop (NYSE: GME) fell 29.1% in May 2020, according to data from S&P Global Market Intelligence. The stock skyrocketed 64% higher in April, setting investors up for a rude awakening the following month.
The pain started on May 2 when GameStop published a preliminary first-quarter business update. Same-store sales plunged 33% lower and curbside pickup orders came in 10% below management's coronavirus-based expectations. Share prices fell 9% that day and continued to slide, adding up to a 32% drop in two weeks.
On May 22, activist investor firms Hestia Capital Partners and Permit Capital Enterprise Fund said that GameStop had squandered $2.5 billion of shareholder value in two years while saddling the balance sheet with an unmanageable debt load. The company fired back with a letter to shareholders, describing the activist investor complaints as "founded on baseless claims and significant misrepresentation of facts." GameStop's stock fell another 9% between the investor complaint and the end of the month.
Source Fool.com
