GameStop recently raised over $2 billion in a stock sale as the video game company capitalized on a renewed meme rally, driven by the return of trader Roaring Kitty. The retailer announced that it sold 75 million shares in an at-the-market equity offering, raising proceeds of $2.14 billion. The funds raised will be used for general corporate purposes, including potential acquisitions and investments. Despite this successful stock sale, GameStop’s stock price dipped more than 1% in premarket trading the following day.
Shares of GameStop continued to experience a rollercoaster ride following the stock sale, with prices up by around 8% so far. Wedbush GameStop analyst Michael Pachter estimated that the average share price during the sale was $28.50, indicating that it coincided with a significant sell-off during Roaring Kitty’s Youtube livestream last Friday. GameStop’s stock plummeted by 40% on Friday after the company unexpectedly released its earnings report, which revealed a 29% drop in sales for the first quarter.
Roaring Kitty, also known as Keith Gill, hosted his first livestream in a few years on the same day as GameStop’s stock decline. Despite reiterating his previous investing thesis, he offered little new reasoning behind his large stake in the company. Gill disclosed that he did not have institutional backers and that the GameStop positions he shared in screenshots were his only investments. Pachter maintains an underperform rating on GameStop and a 12-month price target of $11, significantly lower than the current stock price of $30.49.
Pachter’s bearish outlook on GameStop contrasts with the recent stock sale, which saw the company raising a substantial amount of capital. The rapid rise and fall of the company’s stock price are indicative of the ongoing volatility and speculative nature of meme stocks in the market. Despite the uncertainties surrounding GameStop’s future performance, the success of the stock sale demonstrates investor interest in the company’s potential for growth and expansion through strategic investments and acquisitions.
In conclusion, GameStop’s recent stock sale, driven by a renewed meme rally and the return of trader Roaring Kitty, has raised over $2 billion for the video game retailer. The funds will be used for general corporate purposes, potentially including acquisitions and investments. Despite a dip in stock price following the sale, GameStop continues to experience volatility in the market, with shares up by around 8% so far. The bearish outlook of analyst Michael Pachter contrasts with the success of the stock sale, highlighting the ongoing uncertainty and speculative nature of meme stocks in the market.
