GameStop falls as much as 6% on report of Netflix planning streaming service for video games

GameStop shares fell as much as 6% on Thursday before paring losses to trade slightly lower.
The shares fell following a Bloomberg report that Netflix is eyeing a move into the streaming video game industry, having hired former Facebook VP Mike Verdu.
GameStop and fellow meme stock AMC Entertainment have experienced big price drops in July.
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GameStop shares fell as much as 6% on Thursday following a Bloomberg report that Netflix hired video-game-industry veteran Mike Verdu to oversee a push into the space.

Such a move would encroach on GameStop's territory of selling video games at its more than 4,000 stores. GameStop also runs e-commerce sites across 10 countries. Verdu formerly held executive positions at video-game publisher Electronic Arts, as well as Facebook.

Shares of GameStop have now slipped as much as 17% over the past five days, and are down roughly 22% in July.

"Overall, the market has been favoring large-cap names such as Apple, Microsoft, Netflix, and those alike as smaller cap growth names and meme stocks have taken a hit over the last several weeks," Jake Wujastyk, chief market analyst at TrendSpider, told Insider in a note Thursday.

Fellow meme stock AMC Entertainment was volatile Thursday after declining over the past four sessions and losing more than half its value this month.

"In regards to the technical analysis side of things, GameStop did break down through the longer-term trendline … back in mid-June," Wujastyk said. "However, the continuation down after this breakdown of the longer-term trend has been on very low volume."

He continued: "If the price closes red this week, it would be the sxith red week in a row, something that rarely happens without some type of relief bounce."

Looking ahead, investors will be focused on commentary from Netflix about its business plans when it releases second-quarter financial results on July 20.

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