GameStop Corp. (GME) Turns Negative After EA-Microsoft (MSFT) Partnership

Shares of GameStop Corp. (GME) are trading down more than 7% to $42.78 today. Weakness is being attributed to a new deal between EA and software giant Microsoft (MSFT) to deliver EA Access, an all-new monthly (or annual) membership for gamers exclusively on Xbox One. With this subscription, which is being rolled out in beta to a limited number of players today, users who pay either $4.99/month or $29.99/year will be able to access a collection of EA’s biggest games on Xbox LIVE.

Shares of GameStop meanwhile, continue to fall into negative territory hitting an intraday low of $42.13. GME is trading at an unusually high volume Tuesday with over 8 million shares changing hands. It is currently at nearly 3x its 3-month trading average volume of 2.5 million shares as of 3:07 p.m. ET. GameStop currently trades at a trailing-12 P/E of 13.48, a forward P/E of 9.80 and a P/E to growth ratio of 0.41. The median Wall Street price target on the company’s stock is $52.00 with a high target of $64.00.

Profitability-wise, GameStop’s t-12 profit margin currently stands at 4% while operating ones are at 6.7%. The $4.8 billion market cap company reported $208.90 million in cash vs. $78.60 million in debt in its most recent quarter.

Shares of GameStop are down nearly 7% year-over-year, and 14% year-to-date.

The chart below shows where GME has traded over the past year, with the 50-day and 200-day moving averages included.

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