GameStop (GME.N) generated approximately $933.4 million through the sale of 45 million shares, the struggling video game retailer announced on Friday, causing its shares to surge by more than 12% after trading hours.
The company, primarily reliant on brick-and-mortar stores, has been grappling with the increasing trend of customers turning to e-commerce platforms for purchasing video games and collectibles.
Earlier this month, GameStop disclosed its plan for a share sale amidst a retail buying frenzy triggered by the resurgence of “Roaring Kitty” Keith Gill on social media. Gill’s bullish calls on the company fueled the meme stock rally in 2021.
The share sale was structured as an “at-the-market” offering, wherein shares are sold at the prevailing market price rather than a predetermined one.
The surge in GameStop shares, emblematic of retail fervor, commenced after Gill posted a meme and several video clips from movies. The stock more than quadrupled from the end of April through May 14, before retracing about 60% of those gains by Friday’s close.
While GameStop did not disclose the specific sale price of the shares, Reuters calculations indicate they were sold at an average price of $20.74 each. Currently, the shares are trading at $21.93.
The company stated it intends to utilize the proceeds from the sale for general corporate purposes, including potential acquisitions and investments.
In its recent announcement, GameStop projected its first-quarter net sales to decrease to between $872 million and $892 million, compared to $1.24 billion recorded a year earlier.
