GameStop Shares Fall, But Maybe They Shouldn't Have

GameStop Corp. GME announced in a regulatory filing ahead of Wednesday's market open that it plans on raising up to $400 million to help finance the acquisition of up to 500 stores from AT&T Inc. T

GameStop also revised its fourth quarter guidance higher.

Related Link: GameStop Sees Better-Than-Expected Q4, May Purchase Up to 500 Stores From AT&T

However, shares of GameStop opened for trading at $30.88 and then sank to an intra-day low of $29.16. The stock managed to rebound but was still trading in negative territory after more than three hours of trading.

According to Telsey Advisory's Group Joe Feldman, the selloff in GameStop's stock may not be warranted. The analyst argued that the company's new store announcement offers a "good flow through" to its earnings.

The selloff could be due to the company taking on debt with its pristine balance sheet, he added.

Feldman also told Benzinga that GameStop's Spring Mobile business managed Cricket Wireless and AT&T branded stores and the segment has been "fairly profitable" in addition to diversifying the overall business.

Feldman rates GameStop's stock with a Hold rating and $38 price target.