What happened

Shares of video game retailer GameStop (NYSE:GME) fell 29.1% in May 2020, according to data from S&P Global Market Intelligence. The stock skyrocketed 64% higher in April, setting investors up for a rude awakening the following month.

So what

The pain started on May 2 when GameStop published a preliminary first-quarter business update. Same-store sales plunged 33% lower and curbside pickup orders came in 10% below management's coronavirus-based expectations. Share prices fell 9% that day and continued to slide, adding up to a 32% drop in two weeks.

On May 22, activist investor firms Hestia Capital Partners and Permit Capital Enterprise Fund said that GameStop had squandered $2.5 billion of shareholder value in two years while saddling the balance sheet with an unmanageable debt load. The company fired back with a letter to shareholders, describing the activist investor complaints as "founded on baseless claims and significant misrepresentation of facts." GameStop's stock fell another 9% between the investor complaint and the end of the month.

A teenager sits on a couch, staring at his feet and holding a video game controller.

Image source: Getty Images.

Now what

GameStop will publish its full first-quarter report on Tuesday, June 9. That event will give management a public stage from which it can refute the dissident shareholders' complaints, point by point. If GameStop's leaders choose not to try that gambit, I'm sure we'll see analysts digging for answers in the earnings call.

The annual shareholders' meeting follows on June 12, and that event will settle where GameStop's shareholders stand in the battle of wills between the activist investors and current leadership. Hestia has proposed two candidates for GameStop's boardroom.

The stock has now fallen 46% over the last 52 weeks, including a 60% bounce from the market bottom in early April. Investors are hoping for a renaissance over the holidays, based on high demand for the next generation of video game consoles. Let's just say I'm not holding my breath while waiting for that miracle.