GameStop Completes ATM Equity Offering with Over $2B, GME Stock Jumps 22%

UTC by Steve Muchoki · 3 min read
GameStop Completes ATM Equity Offering with Over $2B, GME Stock Jumps 22%
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GameStop announced the proceeds from the ATM program will be used for general corporate purposes including strategic acquisitions and investments.

Leading American video game company GameStop Corp (NYSE: GME) has announced the competition of the previously disclosed at-the-market (ATM) equity offering program. GameStop filed with the United States Securities and Exchange Commission (SEC) to sell up to 75 million common stock through the ATM program on June 7, 2024.

With the hype surrounding the GameStop stock trading, the company indicated that it has successfully raised $2.137 billion, before commissions and offering expenses. Forward, the company intends to channel the raised funds to general corporate purposes including strategic acquisitions and investments.

Following the announcement on Tuesday, GME stock closed the day trading at $30.49, up 22.80 percent from the day’s opening price. However, GME shares have since dropped nearly 6 percent during the pre-market session to hover around $28.73.

Furthermore, the company has diluted its outstanding shares to about 351.22 million and a market cap of around $10.71 billion. Last month, GameStop sold 45 million shares of its common stock through the ATM program and raised around $933.4 million. The company announced the funds would be directed in the same general corporate purpose including acquisition and investment.

GameStop and the Market Outlook

Amid the ongoing meme stock frenzy, GME stock has surged over 105 percent in the past three months. As Coinspeaker previously pointed out, the GameStop hero Keith Gill alias Roaring Kitty has a significant GME holding of around 50 million shares and another position in call options.

GameStop is well-positioned to grow exponentially in the near future, based on its robust cash holdings. Last week, the company disclosed its first quarterly earnings results that ended on May 4, 2024. According to the report, GameStop recorded net sales of $0.882 billion for the first quarter, compared to $1.237 in the same time last year.

The company registered a net loss of about $32.3 million for the first quarter compared to $50.5 million recorded in the same time last year.

Bigger Picture

GameStop has continued to leverage the notable demand for gaming products, especially through Web3 projects. The company currently holds around $4 billion in net cash, which will play a crucial role in its future growth prospects.

Some market strategists have speculated that GameStop could double down on a major bet in the cryptocurrency industry similar to MicroStrategy Inc (NASDAQ: MSTR).

Furthermore, the cryptocurrency industry is largely regulated with deep liquidity, favored by clearer regulatory frameworks and institutional adoption via spot ETFs.

Already, several GameStop-inspired meme coins on different blockchains have thrived in the recent past. However, GameStop is yet to signal its next move with the pile of cash, thus leaving space for speculation.

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