GameStop recently completed a share sale that began on May 17, with the company selling all 45 million shares for $933 million. This move was seen as a positive one for GameStop, as it raised much-needed cash at better prices. The company sold the shares for an average of $20.74, which was higher than the $19.00 closing price from the previous Friday. GameStop plans to use the net proceeds from the sale for general corporate purposes, including acquisitions and investments.
This news caused GameStop stock to rally more than 25% on Tuesday, with the NASDAQ also reaching a historic high of 17,000 for the first time ever. GameStop’s decision to sell the shares was made after its unexpected rally in May, which saw its stock price surge. With the additional funds raised, GameStop is now in a better position financially, as it had reported just under $603 million in total debt at the end of January.
GameStop is a well-known retailer of video games and gaming merchandise with over 4,400 stores worldwide. Founded in 1984, the company has faced challenges in recent years due to the decline in physical game purchases in favor of digital downloads. However, GameStop has been making efforts to cut costs and improve its financial position, with revenue declining by 10% in the most recent quarter.
One of the key figures in GameStop’s recent history is Ryan Cohen, the founder of Chewy.com, who made a large investment in the company in December 2020. Cohen became Executive Chairman of GameStop and has made significant changes to the management team. With Cohen’s backing, GameStop has been able to make progress towards profitability, with analysts giving the stock a mix of “Hold” and “Buy” ratings.
Looking ahead, GameStop stock has been using the $22.00 level as support, but meme stock traders are hoping to push the stock back up to the $27 to $30 resistance window. Despite some volatility in the stock’s price action, GameStop remains a popular choice among retail stock traders and continues to attract attention from market analysts. Overall, GameStop’s recent share sale and financial maneuvers have put the company in a better position for future growth and stability in an ever-changing market environment.
