Loop Capital’s Chukumba on GameStop: ‘This is not a good quarter’

Anthony Chukumba, Loop Capital managing director, says the current price for GameStop shares are way too overvalued when comparing it to the fundamentals. He said he will be listening to whether its executives have a plan for making GameStop a viable company in its earnings call. Joseph Feldman from Telsey Advisory Group also joins 'Closing Bell' to discuss. For access to live and exclusive video from CNBC subscribe to CNBC PRO: https://cnb.cx/2NGeIvi Investors are finally getting a look at GameStop’s fundamentals following a Reddit-fueled trading frenzy earlier this year. Here’s what the company did after the bell Tuesday. It released fourth-quarter results that missed Wall Street’s estimates on the top and bottom lines.
In its latest executive shake-up, the company named former Amazon and Google executive Jenna Owens as its new chief operating officer.
And in a hint of the transformation that’s got some investors excited about the stock, the company said global e-commerce sales jumped 175% last quarter and accounted for more than a third of its sales in the period.
GameStop also acknowledged in a filing that it was considering selling additional equity shares.
The stock traded initially higher after the bell, but was last down about 3% with traders likely reacting to the the potential share sale, an action many investors and analysts thought would be prudent given the Reddit-fueled run-up in the stock. “Since January 2021, we have been evaluating whether to increase the size of the ATM (at-the-market) Program and whether to potentially sell shares of our Class A Common Stock under the increased ATM Program during the course of fiscal 2021, primarily to fund the acceleration of our future transformation initiatives and general working capital needs,” a filing from the company said. For the fiscal period ended January 2021, GameStop earned $1.34 per share on revenue of $2.12 billion. Wall Street was expecting earnings per share of $1.35 on revenue of $2.21 billion, according to Refinitiv’s average of the six analysts. GameStop’s fiscal fourth quarter earnings typically make up the majority of the company’s yearly earnings, boosted by holiday sales. GameStop’s same-store sales rose 6.5% last quarter. » Subscribe to CNBC TV: https://cnb.cx/SubscribeCNBCtelevision
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