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GameStop Corp raised the amount of new stock it could offer from $100 million to $1 billion on Monday, as the video game retailer continues to profit from a Reddit-fueled rally in its stock this year.

Since January, GameStop stock has risen over 900 percent in extremely volatile trading as amateur investors mobilized on social media platforms like Reddit staged a tenacious buying spree, beating Wall Street hedge funds who had bet against its stock rising.

On Monday, GameStop’s stock dropped as much as 13.9 percent. They briefly changed course to trade higher, but were down again at $188.50 at 11:53 a.m. EDT (15:53 GMT).

According to the Reuters news agency in February, the company has not sold any new shares since the stock market craze began, owing to security laws that prohibited it from doing so without releasing its most recent financial data.

On March 23, GameStop released its fourth-quarter earnings, and on Monday, it released unaudited sales figures for the first quarter of its fiscal year, bringing investors up to date on the company’s financial situation.

GameStop said it would sell up to 3.5 million shares worth up to $1 billion in order to accelerate its transition to e-commerce, which is being led by billionaire Ryan Cohen, the company’s largest shareholder and board member. on the

IMAGE SOURCE: SUMMIT POST NEWS

GameStop, based in Grapevine, Texas, discussed the intense gyrations in its stock over the last three months, which have swung from as low as $19.94 to as high as $347.51, in a regulatory filing for the sale.

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“During this time, we have not experienced any material changes in our financial condition or results of operations that would explain such price volatility or trading volume,” GameStop said.

“Investors that purchase shares of our common stock in this offering may lose a significant portion of their investments if the price of our common stock subsequently declines.”

GameStop had filed a registration statement with the US Securities and Exchange Commission (SEC) in December to sell $100 million in stock via an at-the-market offering (ATM), but it never went live.

On Monday, the company announced that global revenues increased by around 11% in the nine weeks ended April 4.

“A lot of interested parties have been asking about when GameStop would do something like this,” Telsey Advisory Group analyst Joseph Feldman said.

“The stock has remained elevated so the company is taking advantage of the access to capital.”

The prospectus for the current $1 billion ATM offering has been filed with the Securities and Exchange Commission, replacing the previous $100 million plan. GameStop will sell stock over a long period of time thanks to the ATM software.

Source: ALJAZEERA

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