GameStop shares slide as Netflix plots streaming video games
Shares fell as much as 5.7%
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GameStop Corp. shares were under pressure Thursday following a report that streaming giant Netflix is planning to enter the video-game industry.
A streaming video game service from Netflix would serve as competition for GameStop, which sells video games and related items at its more than 4,000 stores and thorough its e-commerce properties across 10 countries.
Shares of the Grapevine, Texas-based GameStop fell as much as 5.7% before paring their losses.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| GME | GAMESTOP CORP. | 11.90 | +0.69 | +6.16% |
| NFLX | NETFLIX INC. | 561.23 | -3.57 | -0.63% |
Netflix on Wednesday hired Mike Verdu, a former Electronic Arts and Facebook executive, as vice president of game development.
The company plans to begin streaming video games within the next year, Bloomberg News reported, citing a person familiar with the situation.
GameStop has over much of the last year has embarked on transforming its business into a major e-commerce player that sells a wide variety of merchandise with fast shipping.
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The effort, which is being spearheaded by Ryan Cohen, co-founder of online pet product supplier Chewy, has resulted in a number of changes, including a shakeup of top management.
The shift in strategy sparked a short squeeze in GameStop shares.
GameStop shares were up 790% this year through Wednesday, but closed at a two-month low. The S&P 500 was higher by 16%.