GameStop (NYSE: GME) stock surged during intraday trading Tuesday after the company announced the completion of its previously disclosed at-the-market (ATM) equity offering program.
GameStop disclosed on June 7, 2024, that it had filed a prospectus supplement with the U.S. Securities and Exchange Commission (SEC) to offer and sell up to 75 million shares of its common stock through the At-the-Market (ATM) Program. The company successfully sold the maximum number of shares registered under the program, generating aggregate gross proceeds of approximately $2.137 billion, before commissions and offering expenses.
This latest share sale marks GameStop’s second successful capital-raising endeavor in the past month, bringing its total raised funds to over $3 billion. The decision to capitalize on the stock rally, fueled by Keith Gill’s endorsement on YouTube, has proven lucrative for the video game retailer. The sale of 75 million shares implied an average price of approximately $28.49 each, per Bloomberg calculations based on a statement released Tuesday.
Last week, GameStop surprised investors with an unexpected earnings release and disclosed plans to sell millions of new shares just hours before Gill, also known as “Roaring Kitty,” made his highly anticipated return to YouTube, drawing in speculators. The ensuing stock rally saw GameStop’s share price more than double in four days, only to plummet on Friday following the announcement of the fundraising plan.
This infusion of capital adds to the $933 million GameStop raised last month, significantly bolstering its cash reserves. With approximately $1.08 billion in cash and equivalents already on hand at the end of the previous quarter, GameStop’s financial position has strengthened considerably.
GameStop plans to utilize the net proceeds from the ATM Program for general corporate purposes, including potential acquisitions and investments.
GameStop (NYSE: GME) Stock Movement
On Tuesday, GME stock soared 22.80%, closing at $30.49, marking a 15.06% increase for the week. The trading volume was 146,914,752 shares, significantly higher than the average daily volume of 39.67 million.
