Business

GameStop earnings cast a shadow over SEC meme stock research

GameStop reported higher-than-expected earnings this week, but that number was overshadowed by disclosures that the Securities and Exchange Commission is investigating. Trading practices..

The company reported on Wednesday that first-quarter sales were up 25% to $ 1.28 billion.

“On May 26, 2021, SEC staff requested the voluntary submission of documents and information regarding the SEC’s investigation into the trading activities of our securities and other securities. Company.”

The company has dispelled concerns that the SEC’s interests could hurt it. “this [SEC] We don’t expect the investigation to have a negative impact on us, “GameStop said in a statement.

In response to this news, GameStop shares opened on Thursday at a 10% drop.

Earlier Wednesday, SEC Secretary Gary Gensler suggested that the Commission may be considering multiple so-called meme stocks. Part of a broader review Of the market structure.

Gary Jensler, Chairman of the Commodity Futures Trading Commission, said:
SEC Secretary Gary Gensler suggested that the Commission is investigating multiple meme stocks as part of an extensive review of market structure and volatility.
Getty Images

In a speech at the conference, he and his staff consider possible responses to stock volatility such as GameStop and AMC, which have skyrocketed over the past year as Reddit’s board continues to hype. Said.

GameStop has risen 1,500% over the past year, and AMC has risen 2,200%.

“The question is whether our stock market is as efficient as possible in light of technological changes and recent developments,” Gensler said.

He made it clear that the staff would take the time to make the changes and accept the industry’s views on the proposal. Still, the news of SEC involvement was enough to weaken investor enthusiasm and question how long the company could survive.

SEC building.
GsmeStop will submit a prospectus to the SEC to sell an additional up to 5 million shares.
AFP via Getty Images

Shareholders asking these questions did not get an answer yesterday. Former CEO George Sherman spoke for only 11 minutes and declined the question.

The company will continue to submit a prospectus to the SEC to sell up to 5 million shares of common stock to investors, which could raise up to $ 1.5 billion for potential acquisitions if the stock price does not change. He said he had sex.

Apart from the announcement, the company refused to provide forecasts.

“Investors are worth more than a meme to assess a company’s fundamental and long-term outlook,” Baird’s Colin Sebastian and Dalton Khan said in a memo to investors.

GameStop earnings cast a shadow over SEC meme stock research

Source link GameStop earnings cast a shadow over SEC meme stock research

Back to top button