GameStop Corp. shares took a dive Monday, after the videogame and consumer electronics retailer finally took advantage of the trading frenzy in its stock to raise money through an “at-the-market” offering.
The company said it filed to sell up to 3.5 million shares of its common stock from time to time. That represents about 5.0% of the 69.9 million shares outstanding as of March 17.
Based on Thursday’s stock closing price of $191.45, the offering could raise up to $670.1 million. The company plans to use the proceeds from the offering “to further accelerate its transformation,” as well as for general corporate purposes and to strengthen its balance sheet.
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Don’t miss: Reddit trading guru Keith Gill looks to have made over $25 million on his GameStop bet.
Separately, GameStop provided preliminary sales results for the fiscal first quarter.
Total sales for the nine weeks through April 4 rose 11% from the same period a year ago. That included a 5.3% rise in sales in February and an 18% sales increase in March.
The FactSet sales consensus for first-quarter of $1.14 billion implies an 11.3% rise from a year ago.
The company said government mandated restrictions resulting from the COVID-19 pandemic, primarily in Europe, negatively impacted results. The store base for the latest nine-week period decreased 13% from a year ago, due to its “store optimization efforts.”
