GameStop Reports 19% Decline in Fourth Quarter Revenue, The Biggest Fall in Nine Months

By Thea Felicity

Mar 27, 2024 11:08 AM EDT

Markets Open Ahead Of Fed Chairman Powell's Afternoon Remarks On Interest Rates — NEW YORK, NEW YORK - MARCH 22: The Gamestop company logo is displayed on a screen as traders work on the floor of the New York Stock Exchange during morning trading on March 22, 2023 in New York City. Stocks opened slightly low ahead of Federal Reserve Chair Jerome Powell’s next decision on whether to continue increasing interest rates to tame inflation after the conclusion of the Federal Reserve’s two-day policy meeting.
(Photo : Photo by Michael M. Santiago/Getty Images)

Video game retailer and one of the original meme stocks, GameStop is poised to experience its sharpest decline in nine months following a significant drop in revenue during the fourth quarter.

According to the company's statement released after the markets closed on Tuesday, net sales amounted to $1.79 billion in the period, marking a substantial 19% decrease compared to the previous year. This news has sent GameStop shares tumbling by 19% to $12.55 in premarket trading, indicating the most significant downturn since June.

Why GameStop declined

The decline comes after GameStop saw a surge in its stock value amid heightened interest in meme stocks, spurred by indications from the US Federal Reserve suggesting a potential rate cut this year. Despite this recent downturn, GameStop had seen an 18% increase in its stock value over the last two trading sessions, according to Market Watch.

Experts also suggest that GameStop's status as a "meme stock" could have contributed to its volatility. Meme stocks are characterized by high levels of speculation and trading activity driven by online communities rather than traditional market fundamentals.

Looking ahead, GameStop remains positive for their next quarters.

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