Mercy Mutanya is a Tech enthusiast, Digital Marketer, Writer and IT Business Management Student. She enjoys reading, writing, doing crosswords and binge-watching her favourite TV series.
GameStop, which was previously on the brink of bankruptcy, was catapulted to record-breaking all-time highs on the stock market earlier this year.
The stock of the gaming retailer GameStop Corp (NYSE: GME) soared after it was announced that 5 million additional shares had been sold. The sale, which brought in close to $1.13B, was to raise capital for stimulating growth and maintaining a strong balance sheet.
The stock surged by about 12.7% on Tuesday. This was after the original meme-stock had announced that its at-the-market equity offering program (ATM Offering) had been completed. The program was first announced on June 9 and when GameStop revealed that it had filed documentation with the SEC to enable it to offer and sell no more than 5,000,000 shares of its common stock. Upon completion of the ATM Offering, GameStop had raised an estimated $1,126,000,000. By Tuesday afternoon, the daily gain on stocks was 10%.
Today as the market opened, GameStop (GME) stock is 0.64% up.
GameStop, which was previously on the brink of bankruptcy, was catapulted to record-breaking all-time highs on the stock market earlier this year. This occurred when retail traders from Reddit’s WallStreetBets forum bought all the GameStop stock they could in an attempt to drive prices higher and eventually squeeze out shorting hedge-funds.
This latest ATM Offering is the second time GameStop has sold additional shares since then. The first was in April when the company sold 3,500,000 shares and raked in $551M.
Investors seem unbothered by this dilution of their stakes in the company as GameStop attempts to use its ongoing rally to aid the acceleration of its e-commerce transformation.
The company has also been undergoing admin changes. It was announced earlier this month that Matt Furlong, a former Amazon exec, was to take on the role of CEO to replace George Sherman. Other former Amazon executives who have joined the team are Jenna Owens as Chief Operating Officer, Matt Francis as Chief Technology Officer and Elliott Wilke as Chief Growth Officer.
In the first quarter of its fiscal year, the company’s revenue exceeded Wall Street estimates and recorded losses per share that were less than what was expected. By May 1, GameStop had paid off all its long-term debt and did not have any loans under its asset-based revolving credit facility.
Meanwhile, White Square Capital, one of the hedge-funds that suffered losses as a result of the GameStop-Reddit saga, is reportedly closing its main fund and returning capital.