GameStop generates over $2 billion through the sale of 75 million shares, taking advantage of the meme craze.

GameStop generates over $2 billion through the sale of 75 million shares, taking advantage of the meme craze.
GameStop generates over $2 billion through the sale of 75 million shares, taking advantage of the meme craze.

The video game company raised more than $2 billion in a recent stock sale due to the revival of a meme rally sparked by the return of trader Roaring Kitty.

GameStop announced Tuesday evening that it had completed an at-the-market equity offering, selling the maximum number of 75 million shares to raise proceeds of $2.14 billion. The retailer intends to use the money for general corporate purposes, which may include acquisitions and investments.

Shares experienced a 1% dip in premarket trading on Wednesday, while continuing its volatile trend with an 8% increase so far this week.

According to Wedbush GameStop analyst Michael Pachter, the average share price of the sale was $28.50, which corresponds to the significant sell-off that occurred during meme stock leader Roaring Kitty's Youtube livestream on Friday.

On Friday, GameStop's shares plummeted 40% following the release of its earnings report, which indicated a 29% decline in sales during the first quarter.

On that day, Keith Gill, also known as Roaring Kitty, hosted his first livestream in several years, which appeared to intensify the selloff. Gill reiterated his prior investing thesis but provided little fresh rationale for his substantial stake. He disclosed that he had no institutional supporters and the GameStop shares he had displayed in screenshots were his sole wagers.

GameStop's stock has a below-average rating from Pachter, with a 12-month price target of $11, which is 60% lower than Tuesday's closing price of $30.49.

by Yun Li

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