GameStop announced on Tuesday that it has successfully completed an “at-the-market” equity offering of its shares, raising approximately $2.14 billion in gross proceeds. This news came shortly after meme stock influencer Keith Gill made his first livestream appearance in three years, attracting over 600,000 viewers.
After the announcement, GameStop’s stock initially rose more than 5% before experiencing a volatile decline of 1.6% in extended trading. The company disclosed that it sold the maximum amount of 75 million shares under the offering at an average price of $28.50 per share, with the stock closing at $30.49 after Tuesday’s trade.
The proceeds from the offering will be utilized for general corporate purposes, including potential acquisitions and investments. CEO Ryan Cohen currently holds an 8.6% stake in the company, as per a regulatory filing on Tuesday, down from 10.5% in May.
GameStop had previously raised $933.4 million by selling 45 million shares in May, amidst a buying frenzy triggered by Gill’s return to social media. Known as “Roaring Kitty” on YouTube, Gill’s bullish calls on GameStop played a significant role in the meme stock frenzy of 2021.
The company also surprised investors last week by releasing its first-quarter results ahead of schedule, revealing a 28.7% decrease in revenues to $881.8 million. Despite the decline, GameStop remains a focal point in the ongoing saga of meme stocks and retail investor activism.
In conclusion, GameStop’s recent equity offering marks another chapter in the company’s volatile journey, driven by a mix of investor speculation, social media influence, and strategic corporate decisions.
Vocabulary List:
- Equity Offering (noun): Process of raising capital by issuing shares of stock to investors.
- Influencer (noun): A person or entity who has the power to affect the purchasing decisions or opinions of others.
- Volatility (noun): The degree of variation in the price of a financial instrument.
- Acquisitions (noun): The process of acquiring control over another company through purchasing its assets or shares.
- Regulatory (adjective): Relating to or making rules or regulations.
- Speculation (noun): Engagement in risky financial transactions in an attempt to profit from fluctuations in the market.
