June 16, 2024

GameStop stock climbed more than 30% in afternoon trading on Tuesday, following the completion of its latest share sale.

​​The company said Friday that it sold 45 million shares of common stock for approximately $933.4 million. It had disclosed that it would be carrying out an “at-the-market” equity offering, meaning that its newly issued shares were sold at market prices.

At the time, GameStop warned that investors who purchase shares in the offering could lose a “significant portion” of their investments due to the stock’s “extreme price fluctuations.”

Shares of the video game retailer traded at $26.20 on Tuesday afternoon, after soaring more than 25% in the pre-market.

The company disclosed in regulatory filings earlier this month that it’s projecting quarterly sales to drop to $872-$892 million, down from $1.24 billion in the same quarter last year. GameStop also projected net losses between $27 million to $37 million for the quarter, an improvement from $50.5 million in losses a year earlier.

GameStop’s shares have been on a wild ride after the return of investor Keith Gill, better known by his social media persona “Roaring Kitty.” After Gill made a cryptic post on X that fans interpreted as a sign to begin trading GameStop stock again, the company’s shares closed nearly 75% higher the next day. AMC and a handful of other stocks also caught the tailwinds of the renewed meme stock frenzy.

Meme stocks are company shares that become wildly popular online and are hotly traded by investors, most of them are individual rather than institutional, causing a surge in share price regardless of the company’s actual performance. (They also pose a massive headache for hedge funds and other short-sellers, who make money by betting against stocks.)

Gill led the early 2021 meme stock rally, which sent GameStop’s shares skyrocketing 1,000% in a matter of weeks. The response this time around, however, was shorter-lived and more muted, with shares beginning to sink just days after Gill’s initial post.

GameStop shares closed up 3.7% on Friday, ending the trading day at $19 apiece. Markets are set to reopen Tuesday morning after being closed for Memorial Day on Monday. At the peak of the meme stock frenzy this past month, the company’s shares traded at a high of $48.75.

Source link

Leave a Reply

Your email address will not be published. Required fields are marked *