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Although the company posted a 25% jump in quarterly profit late on Wednesday, executives failed to lay out fresh details about how it will refashion itself into a gaming and entertainment retailer.
Shares fell 7.6% to $183.70 in premarket, still far below the $482.95 that some investors paid in January, but well above the $18 they traded at in December.
Thursday’s drop was also subdued compared with the 30% move in its shares after each of its previous two earnings reports.
“When this meme trade ends (if ever) this will likely be a steep, ugly fall,” Jake Dollarhide, chief executive officer at Longbow Asset Management, said in a LinkedIn post.
“Revenues are now half of what they were in 2018 when this was a profitable $14 stock before gaming went totally to the cloud.”
The company earlier this year was at the center of a battle between small-time traders and Wall Street hedge funds who had bet that shares would fall. It has since raised more than $1 billion in new equity, partly to fuel its reorganization plans.
Investors had been looking for more details on efforts by chairman and top shareholder Ryan Cohen to focus on e-commerce, while also trying to rejuvenate the physical stores after a year of pandemic-related closures.
Net sales in the second quarter jumped to $1.18 billion, but the company also posted a bigger-than-expected adjusted loss of 76 cents per share.
