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GameStop shares tumbled more than 20% in premarket Friday after the video game retailer said it plans to sell additional shares and reported preliminary results that showed a sales decline in the first quarter.

In a new regulatory filing, the firm said it’s selling up to 45 million class A common shares in an at-the-market offering. The offering comes after GameStop’s stock surged earlier this week in a brief revival of the meme stock trade.

Meanwhile, in a separate statement, GameStop said it now expects net sales to be in the range of $872 million to $892 million, down from compared to $1.237 billion in the same quarter last year. Two analysts polled by FactSet expected first quarter revenue of around $1 billion.

Net loss is expected to be in the range of $27 million to $37 million, compared to a net loss of $50.5 million in the prior year fiscal quarter. The brick-and-mortar video game company has been grappling with stiff competition from e-commerce-based competitors. In late March, GameStop announced an unspecified number of job cuts to reduce costs.

The rally in GameStop this week appeared to be fueled in part by posts on X from the long dormant account of Roaring Kitty, aka Keith Gill, one of the key figures in the 2021 meme stock mania. GameStop hit a high of $64.83 per share on Tuesday, up more than 200% since its closing level last Friday.

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The movement seemed to fizzle out later in the week, with the stock dropping sharply on Wednesday and Thursday. Shares closed Thursday at just $27.67, down more than 50% from the highs of the week. Net retail trader inflows have been much smaller this time than the amount during the trading frenzy three years ago.

Michael Pachter, Wedbush analyst covering GameStop, said GameStop is not in a position to be profitable.

“They made $6 million last year and burned cash,” Pachter said. “We expect them to lose $100 million a year going forward. It’s a race to see if they can close stores fast enough to limit losses, but they have no plan that would suggest they can grow revenues or profits, and their core business is in decline.”

Pachter has a underperform rating on GameStop and a $5.60 price target. 

— CNBC’s Jesse Pound contributed reporting.

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