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GameStop raises $2.14 billion amid Roaring Kitty-fueled retail trading frenzy

Published 2024-06-11, 07:01 p/m
© Reuters. FILE PHOTO: A screen displays GameStop stock trading information on the floor at the New York Stock Exchange (NYSE) in New York City, U.S., June 3, 2024.  REUTERS/Brendan McDermid/File Photo
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(Reuters) -Videogame retailer GameStop (NYSE:GME) said on Tuesday it had completed an "at-the-market" equity offering of its shares to raise roughly $2.14 billion in gross proceeds, days after meme stock influencer Keith Gill's first livestream in three years.

On a livestream on Friday with more than 600,000 viewers, Gill, the key figure behind an eye-popping rally in the struggling company's stock in 2021, joked about memes and interspersed his discussion of GameStop with various disclaimers. The stock closed the session down nearly 40%.

GameStop said it sold the maximum amount of 75 million shares registered under the program.

According to Reuters' calculations, the average sale price of each GameStop share was around $28.50. The company's shares closed at $30.49 after Tuesday's trade.

GameStop said it intends to use the proceeds for general corporate purposes, which may include acquisitions and investments.

Last week, GameStop surprised investors by releasing its first-quarter results ahead of schedule, which showed a 28.7% slide in revenue to $881.8 million, and announcing the stock sale.

CEO Ryan Cohen held an 8.6% stake in the videogame retailer as of June 10, as per a regulatory filing on Tuesday, down from 10.5% as of May 22. The drop was the result of dilution caused by GameStop selling shares, rather than Cohen divesting.

In May, the company had raised $933.4 million by selling 45 million shares. It had disclosed its share sale plan earlier that month amid a retail buying frenzy sparked by the return of Gill on social media.

© Reuters. FILE PHOTO: A screen displays GameStop stock trading information on the floor at the New York Stock Exchange (NYSE) in New York City, U.S., June 3, 2024.  REUTERS/Brendan McDermid/File Photo

Bullish calls by Gill, known on YouTube as "Roaring Kitty", on GameStop were a reason for the 2021 meme stocks frenzy.

Gill has helped attract a flood of retail cash to the beleaguered bricks-and-mortar retailer with his bullish case on Reddit posts and YouTube streams.

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