The stock was one of the first stocks to receive a lot of Reddit and social media attention earlier this year, and it soared by about 1,100% in 2021.

As one of the first emoji icons, GameStop Corp.’s rapid rebound this year may be losing momentum after the company said it plans to sell more stocks and did not provide details on its strategy to turn losses into profits.

The Grapevine, Texas-based video game retailer fell 27% on Thursday to $220.39, the biggest drop since March 24. The stock is one of the stocks that received a lot of attention on Reddit and social media earlier this year. It has soared by about 1,100. As retail investors unite to accept short sellers and optimism about business improvement, it will decline in 2021. %.

The stock is down about 50% from the intraday record high of $483, and investors are still waiting for the newly appointed chairman and activist investor Ryan Cohen to introduce a clear strategy. GameStop did announce two new leaders from Amazon.com Inc. to help transform the brick-and-mortar chain into an e-commerce giant.

Baird analyst Colin Sebastian (Colin Sebastian) wrote in a report: “Investors should be more than just memes to evaluate the company’s fundamentals and long-term prospects.” He said, although it is clearly digital The transformation has laid the foundation, but the board is not yet ready to disclose the details of some of the challenges.

The news that GameStop may offer another 5 million shares and that the US Securities and Exchange Commission is investigating past trading activities also put pressure on its stocks.

“Trading investigations are definitely a big red flag,” David Trainer, chief executive of investment research firm New Constructs, said in an interview. It may be a “needle that can break the stock valuation balloon.”

For Wedbush analyst Michael Pachter, the results of the investigation are unclear, and investors may be even more disappointed with the planned stock issuance. Pachter wrote in a report on Thursday that shelf registration “may be related to” the decline in performance. Nevertheless, he believes that the potential stock sale is positive for the company because it will provide more dry powder for the acquisition.

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GameStop’s earnings conference call was broadcast live on YouTube, with thousands of viewers, and lasted only 11 minutes. Outgoing CEO George Sherman was the only executive to speak, and he declined to answer questions from analysts.

Sherman will be replaced by Matt Furlong, who is responsible for Amazon’s Australian business, on June 21. GameStop also hired another Amazon alumni, Mike Recupero, as its chief financial officer. The new hires are part of Cohen’s broader effort to transform the company into a success story.

GameStop’s application may sell up to 5 million shares through a market offering, allowing retail investors to buy directly. Previously, it had raised US$551 million through ATM issuance in April. Although analysts have called for raising equity, and other meme stocks have conducted a large number of similar transactions, the company did not sell shares this year. The new share sales plan announced on Wednesday enabled GameStop to raise up to $1.51 billion based on the final closing price.

The retailer also reported better-than-expected quarterly sales of 1.28 billion U.S. dollars, and the loss was smaller than expected.