GameStop's ugly fourth quarter and light-on-the-details earnings call are two of the latest examples why shares of video game retailer turned NFT marketplace probably doesn't deserve to trade at the levels they do, argues one veteran strategist.
"This is not a normal investing situation. There is nothing normal about this. So the stock is going to do what it's going to do. My gut — based on my history of watching stocks like this — is they usually resolve themselves to where they should be based upon earnings, cash flows, projections. I just don't see where it is in GameStop," Interactive Brokers chief strategist Steve Sosnick said on Yahoo Finance Live.
Some fans of the OG meme stock seem to be in agreement with Sosnick.
Shares of GameStop plunged more than 5% in early trading Friday after a disappointing quarter from the company. The company reported an adjusted operating loss of $160.7 million, compared to a profit of $28.9 million a year ago.
GameStop declined to provide a full-year outlook. Nor did CEO Matt Furlong (once again) disclose much on his turnaround plan in a more than 10-minute earnings call.
"We know the investments and sacrifices made in fiscal year 2021 will take time to yield tangible value, but we are completely comfortable with that. If GameStop is going to once again, become a market leader in gaming and also realize new revenue opportunities across emerging communities, we needed to lay a lasting foundation rather than taking shortcuts. That is what we did over the past year, as we started to transform into a technology company," Furlong said on the call.
GameStop shares did reverse those losses by midday as the stock was defended by its retail supporters. But trading remained volatile nonetheless. GameStop was a top trending ticker on Yahoo Finance through afternoon trading Friday.
Added Sosnick, "I just don't see why this is a $90 stock. It doesn't make money. There is no real plan for making money."
Brian Sozzi is an editor-at-large and anchor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.
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