GameStop (NYSE: GME) delivered better-than-expected financial results after Wednesday's close. The stock still tanked on Thursday. It poached the world's most successful online retailer for its new CEO and CFO, but selling was the new buying for investors.
The video game retailer did announce that it would be selling more stock, and ramping up the float is one surefire way to nip bullish momentum. However, it's not as if adding 7% more to the share count -- and raising a ton of dough in the process -- is worthy of Thursday's 27% plunge.
The drop is easier to explain than you might think. As I warned earlier this week , GameStop has historically been a dud the day after it reports earnings. It doesn't matter that the meme stock has been a bottle rocket for months. Trends are there for a reason.
For further details see:
Were You Really Surprised by GameStop's 27% Drop on Thursday?