Products line the shelves of a GameStop store on May 28, 2024 in Miami, Florida.
Michael Nagle | Bloomberg | Getty Images
GameStop raised more than $2 billion in a recent stock sale as the video game company took advantage of a renewed meme rally sparked by the return of trader Roaring Kitty.
The retailer announced this on Tuesday evening. that it completed its public offering by selling the maximum number of shares of 75 million to raise proceeds of $2.14 billion. GameStop said it intends to use the money for general corporate purposes, which could include acquisitions and investments.
Shares were up slightly in morning trading Wednesday. The stock continued its rollercoaster ride this week, rising 8%.
Wedbush GameStop analyst Michael Pachter estimated the stock’s average selling price was $28.50, implying that it coincided with the big sell-off during meme leader Roaring Kitty’s Youtube livestream last Friday.
GameStop shares fell 40% on Friday after the company released earnings days ahead of schedule, reporting sales fell 29% in the first quarter.
That day, Roaring Kitty, aka Keith Gill, held his first livestream in several years, which seemed to deepen the sell-off. Gill repeated his previous investment thesis and offered no new arguments for his large stake. He said he had no institutional backing and his only bet was the GameStop position, which he shared in screenshots.
Gill owns 120,000 call options against GameStop and faces tough choices before the June 21 expiration.
Pachter has a poor rating on GameStop and a 12-month price target of $11, more than 60% below Tuesday’s closing price of $30.49.