Meme stock GameStop jumps after raising $933 million in share sales

By Thomson Reuters May 28, 2024 | 5:56 AM

(Reuters) – Meme stock GameStop soared nearly 20% in premarket trading on Tuesday after the struggling videogame retailer said it had raised over $900 million from selling its shares during the market rally earlier this month.

GameStop surged as much as nearly six times its value in the first two weeks of May, partly fueled by the online return of “Roaring Kitty” Keith Gill, a key figure in the 2021 retail trading frenzy.

The stock has since lost 70% of its value up to Friday’s close, taking GameStop’s market value to $5.82 billion.

The company said it had raised $933.4 million after it completed its previously disclosed offering for 45 million shares. It intends to use the proceeds for general corporate purposes, which may include acquisitions and investments.

The brick-and-mortar retailer has been grappling with customers turning to e-commerce firms to buy video games and collectibles. It said earlier this month that it expected its first-quarter net sales to drop to between $872 million and $892 million, from $1.24 billion a year ago.

Tuesday’s move could hurt short sellers of GameStop’s shares, who bet on a stock’s decline.

About 20.5% of GameStop’s publicly available shares were in a short position, data from analytics firm Ortex Technologies showed.

(Reporting by Medha Singh in Bengaluru; Editing by Pooja Desai)