GameStop slumps as sluggish sales, stock offering undercut rally

GameStop tumbled 16% in premarket trading after the video-game retailer missed third- quarter sales estimates and announced plans to sell up to $100 million in stock.

Sales fell 30% to $1 billion in the period ended Oct. 31, GameStop said on Tuesday. Analysts had predicted $1.09 billion. The stock sale, a so- called at-the-market offering, will be underwritten by Jefferies Financial Group Inc.

The money will be used to fund new-product efforts and build the company’s e-commerce presence, GameStop said in a prospectus. As part of its comeback efforts, the company will continue to shutter brick-andmortar stores next year and add more products.