GameStop shares tumble amid big quarterly loss, SEC probe

• GameStop reported net loss of $105.4 million for the fiscal third-quarter

• SEC issued a subpoena in August for an investigation into its share activity

The videogame retailer GameStop shares fell about 4% in extended trading on Wednesday, after it reported bigger-than-expected quarterly loss.

The retailer also disclosed that it was issued a subpoena by the U.S. Securities and Exchange Commission in August for an investigation into its share activity.

"We are in the process of producing the documents and have been and intend to continue cooperating fully with the SEC Staff regarding this matter," GameStop said in a regulatory filing on Wednesday.

For the fiscal third-quarter, the company reported net loss of $105.4 million, or $1.39 per share, compared to a loss of $18.8 million, or 29 cents per share, in the prior year.

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The company said its sales grew since it has expanded relationships with brands such as Samsung, LG, Razer. Total revenue grew to $1.30 billion from $1 billion in the previous year.

GameStop shares have risen exponentially since the meme stock frenzy due to Reddit posts. The SEC has, therefore, requested documents about the company’s trading activity.

GameStop expansion

The newly elected CEO Matthew Furlong said on a call on Wednesday that GameStop has hired more than 200 senior employees from some top technology companies.

He said that the company has expanded merchandise by adding more personal computing gaming items.

GameStop has opened new offices in Seattle and Boston to attract talent in the tech hubs, the company said.

Furlong also said the company aims to improve customer service and faster delivery.

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“We continue to see a customer-first culture taking hold throughout our stores, fulfillment centers and corporate offices,” he said on the call. 

“Maintaining this emphasis on the customer will remain key as we work to grow across categories and new areas.”

GameStop shares are up 825% this year as of Wednesday’s close, giving the company a market value of $13.28 billion.

Picture Credits: Getty Images