TLDR
- GameStop raised $2.14 billion through an “at-the-market” equity offering, selling the maximum of 75 million shares registered under the program.
- The average sales price of each GameStop share was around $28.50.
- The funds raised will be used for general corporate purposes, including potential acquisitions and investments.
- The equity offering came days after meme stock influencer Keith Gill’s (known as “Roaring Kitty”) first livestream in three years, which discussed GameStop and incorporated memes.
- Gill’s bullish calls on GameStop were a significant factor in the 2021 meme stock frenzy, attracting retail investors to the struggling company.
GameStop, the video game retailer at the center of the meme stock frenzy, has successfully raised $2.14 billion through an “at-the-market” equity offering.
The company sold the maximum of 75 million shares registered under the program, with the average sales price of each share being approximately $28.50.
The equity offering comes just days after the return of Keith Gill, better known as “Roaring Kitty,” to live streaming. Gill, a key figure in the 2021 rally of GameStop’s stock, hosted a live stream on Friday with over 600,000 viewers.
This was his first streaming session in three years, and he discussed GameStop while incorporating various disclaimers and humor about memes. Ironically, the company’s stock value dropped by nearly 40% following the stream.
Gill’s bullish calls on GameStop were a significant factor in the meme stock frenzy that unfolded in 2021. His optimistic predictions about the struggling retailer attracted a flood of retail cash from investors, leading to an unexpected surge in the company’s stock price.
This, in turn, created a financial squeeze on professional Wall Street firms that had bet against GameStop.
The recent equity offering is the second share sale by GameStop in a month. In May, the company raised $933.4 million by selling 45 million shares.
This earlier share sale came after a retail buying frenzy sparked by Gill’s return to social media.
GameStop stated that the proceeds from the $2.14 billion equity offering will be used for general corporate purposes, which may include potential acquisitions and investments.
While the company’s CEO, Ryan Cohen, held a 10.5% stake in GameStop as of May 22, his stake has since decreased to 8.6% as of June 10, according to a regulatory filing on Tuesday.
— Roaring Kitty (@TheRoaringKitty) June 10, 2024
Despite the recent stock sale, GameStop’s shares initially rose by more than 5% following the announcement of the equity offering.
However, the stock later experienced a 1.6% decline in extended trading. The company’s shares are currently trading at around $30 per share, well below the record high of $48 they reached earlier in June.
The meme stock phenomenon, which gained momentum during the COVID-19 pandemic, saw retail investors flock to stocks that had been heavily bet against by professional investors, such as hedge funds.
In addition to GameStop, other companies like cinema chain AMC and technology firm BlackBerry also saw their share prices experience significant volatility and sharp increases during this period.
