GameStop Corp. (NYSE: GME) has been the center of a battle between institutional investment houses and retail investors. Investors have seen GameStop shares jump as high as nearly $500 and quickly fall to $40, all in the course of about a week in the tug-of-war between these two factions. What about the actual company? How Is GameStop doing in the midst of all this?
Finally, the company is taking advantage of this “meme” stock rally and looking to capitalize. Normally after a stock makes a massive run like we have seen in GameStop, the company will issue a secondary offering to raise funds for the company. However, we hadn’t seen a move from GameStop’s management to do so, despite the stock hovering around $200 for the past month.
Now seems to be the time for GameStop to get in gear. This also comes after the firm poached a couple of executives from Amazon. The company is building a team and raising cash to take itself in a new direction. It is only a matter of time before we see if this actually pays off.
The firm filed with the U.S. Securities and Exchange Commission (SEC) for a secondary offering. Accordingly, GameStop will be offering up 3.5 million shares of its common stock from time to time through an at-the-market (ATM) equity offering program. The aggregate offering price will be up to $1.0 billion with an overallotment option up to $100 million.
Note that the timing and amount of any sales will be determined by a variety of factors considered by the firm. Also, the sole underwriter and sales agent for the offering is Jefferies.
GameStop intends to use the net proceeds from any sales of its common stock under the ATM offering to accelerate its transformation, as well as for general corporate purposes and to further strengthen its balance sheet.
GameStop stock traded down 6% Monday morning, at $179.72 in a 52-week range of $2.83 to $483.00. Analysts have a consensus price target of $40.64.