GameStop Corp (NYSE:GME) stock has lost close to 16% this week following its annual shareholder meeting, where CEO Ryan Cohen emphasized a strategic pivot towards profitability through cost reduction.

Cohen also emphasized the need to avoid the "hype" associated with the meme-stock frenzy, Bloomberg reports.

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Cohen attempted to transform GameStop from a failing brick-and-mortar store into a digital storefront for the latest game releases. Despite his efforts and the hiring (and subsequent firing) of several Amazon.com Inc (NASDAQ:AMZN) executives, GameStop's software revenue fell 30% in the first quarter compared to the previous year. The report highlighted that the company now resembles a hybrid of a traditional game retailer and a toy store, selling items like Pokemon plushies and Funko pop figurines, but toy sales also declined by 20%.

GameStop has closed numerous locations, shut down two distribution centers, and laid off employees to cut costs.

Michael Pachter, an analyst at Wedbush Securities, criticized the company's business model, per the report.

The company announced a 75 million share sale program, raising $2.14 billion, capitalizing on a stock rally driven by meme-stock trader Keith Gill.

Piers Harding-Rolls, research director for games at Ampere Analysis, expected support from the company's cash position and upcoming releases of new video game consoles from Sony Group Corp (NYSE:SONY), Nintendo Co, and Microsoft Corp (NASDAQ:MSFT).

Price Action: GME shares traded lower by 1.66% at $24.29 premarket at the last check on Thursday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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