GameStop completed an ATM share sale to raise over $2.1 billion by selling 75 million new shares amid meme-trading chatter and a volatile market backdrop.
GameStop Corp (NYSE:GME) late on Tuesday confirmed it closed its ‘at the market’ (ATM) share sale, amidst softening share prices, to raise over $2.1 billion of new proceeds.
The game retail sold 75 million new shares at an average share price of $28.50.
GameStop’s brokers were selling the shares against a volatile market backdrop, and the circus of ‘meme trading’, social media, and the Roaring Kitty livestream.
“Given that GameStop’s share price closed at $46 on June 6, we had assumed it would complete the sale at an average price of $40,” Wedbush analyst Michael Pachter said in a note.
“Instead, the shares declined precipitously on June 7, reflecting news from Reddit following a rambling presentation by Roaring Kitty (Keith Gill), closing that day at $28.
“We are lowering our price target to $11.00 from $13.50 to reflect lower-than-expected proceeds from the share offering. Our revised price target reflects roughly $9.50 per share of net cash, plus a going concern value of roughly $1.50 per share.”
Wedbush has an ‘underperform’ rating for GameStop.
GameStop previously said it intended to use the proceeds for general corporate purposes, potentially including acquisitions and investments.
