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GameStop shares spike as company sells $1.1 billion in stock

GameStop shares spike as company sells $1.1 billion in stock

GameStop’s stock jumped by as much as 10 percent after the company announced it had raised $1.1 billion through the sale of five million shares.

The videogame retailer — which earlier this year became the preeminent “meme stock” as rookie traders bid up its shares at the expense of big hedge funds — had previously announced its plan to sell new stock “for general corporate purposes as well as for investing in growth initiatives and maintaining a strong balance sheet.”

In April, the Reddit darling sold 3.5 million shares, raising $551 million in an effort to capitalize on its popularity and help it raise cash to accelerate its e-commerce business.

The capital raises come amid rapid changes at the 37-year-old retailer, which was catapulted to new fame when Chewy founder Ryan Cohen, began investing in the company last year, taking a majority stake in it and becoming its chairman.

Cohen has since recruited top executives from Amazon, Walmart, QVC and Chewy to transform the company from a bricks and mortar retailer into an e-commerce hub.

Photo of GameStop app
GameStop is beefing up its e-commerce business.
Dado Ruvic/Illustration/REUTERS

In its latest sale, GameStop’s shares sold for an average of $225.20, according to Bloomberg, above the stock’s 50-day moving average of $193.09.

So far this year, its stock has risen by more than 960 percent.

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Julia Mangels

Julia has handled various businesses throughout her career and has a deep domain knowledge. She founded Stock Market Pioneer in an attempt to bring the latest news to its readers. She is glued to the stock market most of the times and just loves being in touch with the developments in the business world.

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