GameStop Slides Following Earnings As Possible Share Sale Discussed

Also commenting on the company's results, Bank of America analyst Curtis Nagle noted that while GameStop reported fourth-quarter earnings per share of $1.34 that was above his estimate, the beat was driven "entirely" by a large tax credit in the quarter. The company's fourth quarter EBITDA of $48M, meanwhile, missed his $144M estimate by 66% given "very underwhelming" gross margins, Nagle told investors. GameStop reported that global comp sales were up 23% for February, but this compares to U.S. industry hardware and software sales up 82% per NPD, implying "a continuation of material share loss," he added. The analyst reiterated an Underperform rating and $10 price target on GameStop shares.

PRICE ACTION:

 In morning trading, shares of GameStop have dropped over 18% to $148.90.

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