Shares of video game retailer GameStop Corp. (GME) are experiencing a significant decline, marking their largest daily percentage drop since early December. Currently, the stock is down 5.5% on Tuesday, on track to record its biggest decline since December 5, 2023, when it fell 12.2%. This decline also marks the third consecutive day of losses for GameStop, with the stock having fallen in seven out of the last eight days.
Meme Stock Rally Not Enough to Sustain GameStop
Despite a rally reminiscent of a meme, GameStop has struggled over the past year. Over the last 52 weeks, the stock has fallen 32%, while the S&P 500 index has gained 18.9%. GameStop, along with fellow meme-stock favorite AMC Entertainment Holdings Inc. (AMC), experienced a surge in popularity driven by online communities like WallStreetBets on Reddit in January 2021. During this time, GameStop’s stock skyrocketed by over 1,200%, and its market capitalization reached $17 billion. However, the stock has since declined significantly, with GameStop’s market cap currently standing at $4.51 billion.
Leadership Changes Aim to Revitalize GameStop
Facing challenges in its industry, GameStop underwent significant leadership changes last year. In June, CEO Matthew Furlong was fired, and activist investor Ryan Cohen was elected as executive chair by the company’s board. In late September, Cohen also took on the role of CEO, as part of his ongoing efforts to revive GameStop.
AMC Entertainment Holdings Inc. Faces Similar Slide
Alongside GameStop, shares of AMC Entertainment Holdings Inc. (AMC) are also experiencing a continued slide. On Tuesday, AMC hit a record intraday low and is on track to achieve another record-low close.