Benzinga | Dec 27, 2021 06:40AM EST

Why Ascendiant Is Bearish On GameStop?

* Ascendiant analyst Edward Woo lowered the price target on GameStop Corp (NYSE:GME) to $23 from $24, implying an 84.9% downside, and reiterated a Sell.

* "Reddit trading" may rally the shares in the near term, but this will likely fade in 2022 as digital threats increase, given the company's "weak" earnings outlook, Woo tells.

* Recent reports by video game publishers show that digital revenue is increasing fast, Woo adds.

* He remains " very concerned" about the long terms prospects of GameStop's core video game business "once hardware sales temper as the installed base matures."

* GameStop is a U.S. multichannel video game, consumer electronics, and services retailer.

* GameStop sells new and second-hand video game hardware, physical and digital video game software, and video game accessories, mainly through GameStop, EB Games, and Micromania stores and international e-commerce sites.

* Price Action: GME shares traded lower by 0.58% at $151.26 in the premarket session on the last check Monday.