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Shares of GameStop are plunging in the pre-market session, down about 7% after the company announced earnings that missed estimates.

But it wasn't the company's perfunctory and boring earnings miss that drew the attention of Wall Street. Rather, it was the company announcement of a new policy that allows its Chief Executive Officer, Ryan Cohen, to "invest the company’s excess cash in equity securities", according to Bloomberg.

In other words, GameStop is letting Cohen trade with shareholder cash.

Analysts were slightly skeptical, with Wedbush calling the plan “the most inane decision we have ever seen”, and analysts Michael Pachter and Nick McKay adding: “Investors have a myriad of investment vehicles available to them and therefore do not need GameStop to act as a mutual fund."

The analysts instead suggested the company use its excess cash to buy back its own shares. 

Baird Equity Research noting that the results for the quarter were "mixed" and Jefferies noted: “Without management commentary, we judge the results for themselves: notable cost discipline, but against unanswered headwinds in physical video games, with Collectibles now also facing pressures”

Baird also said it continues to "see meaningful risks in the business model" and it "looks forward to hearing more details on future operational strategy", per a Bloomberg earnings wrapup. 

GameStop's third fiscal quarter saw a 9% drop in sales to $1.08 billion, with a significantly reduced net loss of $3.1 million compared to last year's $94.7 million. These results follow cost-cutting measures under the new leadership of Chairman Ryan Cohen, who replaced former CEO Matt Furlong.

As WSJ noted, the company has not offered any forecasts nor planned an analyst conference call.

This quarter marked Ryan Cohen's inaugural quarter as CEO, following the June dismissal of former CEO Matt Furlong. Upon assuming leadership in late September, Cohen cautioned staff about the necessity of cost reductions for the company's survival.

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