Shares of high-flying GameStop (NYSE: GME) are down over 9% today after the video game retailer announced a share offering that allows the company to sell up to 3,500,000 shares of its common stock. The company said shares will be sold from time to time through an “at-the-market” equity offering program.
GME said it intends to use the net proceeds from a sale to “further accelerate its transformation as well as for general corporate purposes and further strengthening its balance sheet.” The offering will be managed by Jefferies, said GME.
Also today, GameStop announced preliminary sales results for a period representing the nine weeks ended April 3, 2021.
For the first nine-weeks of fiscal 2021, total global sales increased approximately 11% from the nine-week period ended April 4, 2020
February: the four-week period ended February 27, 2021 total global sales increased approximately 5.3% from the four-week period ended February 29, 2020
March: the five-week period ended April 2, 2021, total global sales increased approximately 18% from the five week period ended April 4, 2020.
The company also reiterated that the company’s operations across 14 countries were “negatively impacted due to temporary store closures and other government mandated restrictions that resulted in limited operations.”
“During the first nine weeks of fiscal 2021, similar government mandated restrictions resulted in limited operations, primarily in Europe, and the Company operated with an approximately 13% decrease in the store base due to its strategic store optimization efforts,” the company said in a statement.
GME is hoping to capitalize on the much higher share price. AMC, which also saw its share erupt higher amid the WSB frenzy, benefited from the Reddit trading frenzy as it moved to sell stock but GME was unable to do the same due to regulatory restrictions.
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