On Monday, almost all the shares of GameStop have toppled by double digits as soon as the video game retailer has mentioned that it might sell up to almost $1 billion worth of additional shares following a historic Reddit-fueled short squeeze.
Notably, the GameStop stocks have dropped by more than 10% which is around $171 pieces after announcing stocks offering around 3.5 million shares. However, the company mentioned it intends to make use of the proceeds to further accelerate its e-commerce transformation and for general corporate purposes and further strengthening its balance sheet.
However, the offering is viewed as a way for the retailer for capitalizing on its recent jaw-dropping rally prompted by a band of Reddit-obsessed retail traders who have targeted heavily shorted stocks. In January, within a single week GameStop upsurge by 400% which almost above $400 a share. A brick-and-mortar retailer, GameStop traded less than $20 a share at the beginning of the year.
In the middle of a technology and e-commerce transition, GameStop is led by activist investors and board member Ryan Cohen who is Chewy’s co-founder. Now the company has hired the former Amazon and Google executive Jenna Owens who is the new chief operating officer.
On Monday, in a separate release, Gamestop has mentioned its total global sales enhanced around 11% for the first time in the nine weeks of fiscal 2021 from the starting period of the previous year. However, within the five-week period which ended up on 2nd April, total global sales have grown up to almost 18% as per the company.
Well, two weeks ago, the company has reported worse than it had expected fourth-quarter results which missed on the top and bottom lines. On the other hand, GameStop mentioned that it has e-commerce sales that jumped to 175% last quarter and has accounted which is more than a third of its sales in the period.
