GameStop board move ‘one of the most inane’ Wedbush has ever seen

Wedbush says GameStop reported mixed Q3 results, with revenue missing by around $100M and earnings about 10c above Street estimates. However, “in one of the most inane moves we have ever seen,” GameStop’s board delegated authority to manage the company’s portfolio of securities to its CEO and has extended the investment policy’s range to include equities, the analyst tells investors in a research note. The firm says investors have “myriad” investment vehicles available and therefore do not need GameStop to act as a mutual fund. If GameStop truly believes in the value of its shares, it should use its excess cash to buy back stock, says Wedbush. It views the company’s decision to invest in equities other than its own as “alarming,” saying it implies management believes it will achieve better returns by buying equities aside from its own. The firm keeps an Underperform rating on GameStop with a $6 price target. The stock in morning trading is up 4% to $15.44.