GameStop Shares Surge After Raising $933 Million Amid Meme Stock Rally

GameStop

GameStop experienced a 14% surge on Tuesday after the struggling video game retailer announced it had raised $933 million by taking advantage of a rally in the meme stock earlier this month.

In the first two weeks of May, GameStop’s shares increased nearly sixfold, partly driven by the reappearance of “Roaring Kitty” Keith Gill, a significant figure in the 2021 retail trading frenzy. However, the stock has since lost 70% of its value, bringing GameStop’s market capitalization to $5.82 billion as of Friday’s close.

GameStop

The company reported raising $933.4 million after completing its previously disclosed offering of 45 million shares. It plans to use the proceeds for general corporate purposes, which may include acquisitions and investments.

“(GameStop) can take advantage of its share (surge) as long as the price remains elevated and they continue to have an at-the-market on file,” said Art Hogan, chief market strategist at B. Riley Wealth. “They still have a lot of hurdles to cross before they become something that reflects the kind of price their shares are trading at.”

Earlier this month, GameStop projected its first-quarter net sales to fall to between $872 million and $892 million, down from $1.24 billion a year ago.

Tuesday’s stock move could negatively impact short sellers of the company’s shares, who bet on the stock’s decline. According to Ortex Technologies, about 20.5% of GameStop’s publicly available shares were in a short position.

AMC, another meme stock, also completed a $250 million “at-the-market” share sale program this month.

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Pooja Chauhan

Pooja Chauhan: Your Source for Entertainment and Box Office News Pooja Chauhan is a passionate writer and dedicated journalist specializing in delivering the latest updates and insights from the world of entertainment and box office. With a keen eye for detail and a deep love for cinema, Pooja brings her readers accurate and engaging coverage of all things related to movies, celebrities, and the dynamic world of showbiz. Her commitment to keeping her audience well-informed and entertained makes her a valuable voice in the realm of entertainment journalism. When she's not busy uncovering the latest scoops, Pooja enjoys exploring classic films and indulging in creative writing." Contact us: admin@bollywoodfever.co.in

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