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GameStop raises $2.14 billion amid Roaring Kitty-fueled retail trading frenzy

In World
June 12, 2024

(Reuters) – GameStop said on Tuesday it had completed an “at-the-market” equity offering of its shares to raise roughly $2.14 billion in gross proceeds, days after meme stock influencer Keith Gill’s first livestream in three years.

Shares of the videogame retailer, which has been at the center of the meme stock frenzy, rose more than 5% on the news before reversing course to fall 1.6% in volatile extended trading.

On a livestream on Friday with more than 600,000 viewers, Gill, the key figure behind an eye-popping rally in the struggling company’s stock in 2021, joked about memes and interspersed his discussion of GameStop with various disclaimers. The stock closed the session down nearly 40%.

GameStop said it sold the maximum amount of 75 million shares registered under the program.

According to Reuters’ calculations, the average sales price of each GameStop share came at around $28.50. The company’s shares closed at $30.49 after Tuesday’s trade.

The company said it intends to use the proceeds for general corporate purposes, which may include acquisitions and investments.

GameStop last week surprised investors by releasing its first-quarter results ahead of schedule where it showed a 28.7% slide in revenues to $881.8 million, and announcing the stock sale.

CEO Ryan Cohen held an 8.6% stake in the videogame retailer as of June 10, as per a regulatory filing on Tuesday, down from 10.5% as of May 22.

In May, the company raised another $933.4 million by selling 45 million shares. It had disclosed its share sale plan earlier that month amid a retail buying frenzy sparked by the return of Gill on social media.

Bullish calls by Gill, known on YouTube as “Roaring Kitty”, on GameStop were a reason for the 2021 meme stocks frenzy.

Gill has helped attract a flood of retail cash to the beleaguered bricks-and-mortar retailer with his bullish case on Reddit posts and YouTube streams.

(Reporting by Manya Saini, Sourasis Bose and Deborah Sophia in Bengaluru; Editing by Shilpi Majumdar and Vijay Kishore)

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