GameStop (NYSE:GME) had initially planned on holding its annual meeting on June 13. However, a surge in demand led to a malfunction of its virtual webcast and a postponement to today, June 17. With the meeting now concluded and GME stock taking a beating today, let’s review the results.
CEO Ryan Cohen kicked off the meeting by providing a statement on GameStop’s future and his opinion of the macroeconomic environment. He continued to echo his stance on cutting cuts and focusing on profitability.
“Revenues without profits and prospects of future cash flows are of no value to shareholders,” said Cohen. “This means a smaller network of stores with an expanded assortment of higher value items that fit into our trade-in model.”
GameStop was unprofitable for the quarter ended May 4 with a net loss of $32.3 million compared to a loss of $50.5 million a year ago.
Cohen also noted that GameStop has a strategic advantage in the form of a strong balance sheet. Since May 17, the video game retailer has issued 120 million shares, resulting in gross proceeds of about $3 billion.
At the same time, issuing shares results in dilution. GameStop’s shares outstanding totaled 426.21 million as of June 10, up by 21% compared to 351.18 million shares on May 22.
Cohen Provides GameStop Update
The GameStop CEO said that a strong balance sheet is especially important in times of economic uncertainty. Additionally, he characterized the past decades’s monetary and fiscal policies across the world as “historical anomalies.”
“Exiting from an ultra-low interest rate environment is likely to have unforeseen, reverberating effects across the economy, as seen with inflation hitting 40-year highs in 2022.”
As a result of higher interest rates, an investment must have a higher rate of return in order to offset the risk-free return, explained Cohen.
“As my father always said, actions speak louder than words. We are focused on building shareholder value over the long term. We are not here to make promises or hype things up. We are here to work. Thank you for being a shareholder,” concluded Cohen.
GME Stock: GameStop Releases Meeting Results
After Cohen’s statement, GameStop revealed the results of the four proposals. Proposal number five was a customary proposal to transact business as usual and was not covered during the meeting.
Three of the proposals, which involved electing five directors, approving executive compensation, and ratifying the appointment of Deloitte & Touche as GameStop’s independent accounting firm, were approved.
Shareholders rejected proposal number four, although GameStop had recommended that its shareholders do so. The proposal, submitted by the New York City Comptroller, requested a board matrix from GameStop’s directors. This matrix would include self-identified information such as skills, attributes, gender and race/ethnicity.
Meanwhile, GME stock is down by over 10% today. This is likely attributed to a lack of material announcements from the company, such as a plan for its cash pile or a potential acquisition of another company.
On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
