Wednesday, July 24, 2024
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GameStop recently announced the completion of an “at-the-market” equity offering, raising approximately $2.14 billion in gross proceeds. This move follows a significant event in the meme stock community: Keith Gill, known as “Roaring Kitty,” conducted his first livestream in three years, drawing over 600,000 viewers. Gill, a prominent figure in the 2021 GameStop stock rally, discussed GameStop and joked about memes during his livestream, which was interspersed with various disclaimers. Despite the excitement, GameStop’s stock saw a sharp decline, closing the session down nearly 40%.

Following the equity offering news, GameStop’s shares initially rose more than 5% but then reversed course, falling 1.6% in volatile extended trading. The company sold the maximum 75 million shares registered under the program, with an average sale price calculated at around $28.50 per share. On the day of the announcement, GameStop’s shares closed at $30.49.

GameStop plans to use the proceeds from the share sale for general corporate purposes, which may include acquisitions and investments. This follows a previous equity raise in May, where the company generated $933.4 million by selling 45 million shares amid a retail buying frenzy sparked by Gill’s return to social media.

GameStop’s recent financial performance included a surprise early release of its first-quarter results, revealing a 28.7% decline in revenues to $881.8 million. Additionally, CEO Ryan Cohen’s stake in the company decreased to 8.6% as of June 10, down from 10.5% as of May 22, according to a regulatory filing.

Keith Gill, through his Reddit posts and YouTube streams, played a significant role in the 2021 meme stock frenzy, attracting a surge of retail investor interest in GameStop. His continued influence in the meme stock community is evident, as seen by the market’s reaction to his recent livestream.

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