Gamestop (GME  ) shares declined 10% following the company's third quarter earnings report in which the company missed estimates on the top but beat on the bottom-line. In many ways, Gamestop is the original "meme" stock as a social media-driven short squeeze caused shares to rise from $19 per share to $483 in about 3 weeks time in January of this year.

Traders on social media piled on to Gamestop due to its high short interest and belief that the company would be able to pivot its business model as Chewy (CHWY  ) founder Ryan Cohen had recently joined the company. Additionally, results were better than expected due to the pandemic causing a surge in video game and console sales. However, Wall Street remained pessimistic about the company as it sees video game sales moving to download starting with the next generation of consoles.

Therefore, it's surprising that Gamestop's shares have been able to retain the bulk of its gains even as the short squeeze catalyst dissipated. Recently, there have been further selloff in many stocks that have become retail favorites which also led to a 40% pullback in Gamestop shares since mid November.

Inside the Numbers

In Q4, Gamestop reported $1.3 billion in revenue which topped estimates of $1.2 billion. In terms of earnings, the company reported a loss of $1.39 per share which was significantly worse than expected.

The company also said it had increased its inventory for the holiday season and to insure against any delays due to supply chain issues.

On the conference call, the company also said that it had expanded its offering of PC gaming merchandise across most of its U.S. stores. It also added a new facility in Reno, Nevada and Pennsylvania for better fulfillment to handle increased online orders. Its investments in logistics and fulfillment are consistent with the company's new CEO and CTO, who are Amazon (AMZN  ) veterans.

Overall, Gamestop shares remain very overpriced, and the company remains opaque about its strategy. The rise in its stock price gave it an opportunity to raise nearly a $1 billion by issuing shares. So far, there is little sign of a grand strategy that would justify such a sharp appreciation.