You Probably Shouldn't Own GameStop During Earnings Season
Shares of GameStop (NYSE: GME) took a 10.3% hit on Wednesday after posting a much wider quarterly deficit than expected. One analyst argued that the small-box video game retailer failed to deliver enough details about its transformation into a tech company. And an SEC subpoena requesting documents related to an investigation into the stock's trading activity also wasn't a good look.
GameStop taking a hit on the trading day after posting quarterly results shouldn't come as a surprise, even before assessing the catalysts behind the carnage. The stock has now fallen on earnings news in 11 of the past 13 quarters.
We're not talking about small dips, either. The stock's average move is a decline of 13.8% for the day. Wednesday's slide is actually kinder than the average post-earnings sell-off. Sometimes, the trend is not your friend.
Source Fool.com
