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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