GameStop shares surge after raising nearly $1 billion from share sale program

The video-game retailer capitalized on a flurry of trading earlier this month by selling 45 million shares to raise roughly $933 million, according to a statement Friday. The stock jumped as much as 25% in extended trading to hit $23.80, however, it remains well below a peak of nearly $65 which it hit on May 14.

The move mirrored that of fellow meme-stock darling AMC Entertainment Holdings Inc. which capitalized on share rallies earlier this month when both stocks saw spikes without fundamental updates. The movie theater shares gained alongside GameStop in late trading, rising 2.9% to $4.98 at 4:36 p.m. in New York.

The flash-in-the-pan flurries earlier this month were triggered by a post from the “Roaring Kitty” account on X, the handle used by Keith Gill who operated under the moniker online and shot to fame in 2021 as he rallied traders on Reddit around GameStop.

GameStop’s so-called at-the-market program was announced earlier this month, a move that enabled its bank to create shares for sale, with the proceeds being added to its pile of cash that the company said would be around $1.1 billion prior to the funding. The company plans to use the haul for general corporate purposes, which may include acquisitions and investments.

The video-game retailer’s underlying business has struggled, with most gamers opting to download new titles in place of visiting brick-and-mortar stores. As part of its maneuver to sell shares, GameStop previously gave a peek at its operations over the past few months. The business has struggled, with net sales coming in below the two estimates as it focuses on cutting costs.

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This story has been published from a wire agency feed without modifications to the text. Only the headline has been changed.

Published: 25 May 2024, 08:11 AM IST