Miami, Florida – GameStop, a video game company, raised over $2 billion in a recent stock sale, seizing the opportunity presented by a renewed meme rally fueled by trader Roaring Kitty’s resurgence.
The retailer’s successful completion of an at-the-market equity offering on Tuesday evening involved selling the maximum of 75 million shares, resulting in proceeds of $2.14 billion. GameStop plans to utilize these funds for various corporate purposes, including potential acquisitions and investments.
Following this development, GameStop’s shares experienced a marginal decline of more than 1% in premarket trading on Wednesday. Despite this, the shares have seen an 8% increase over the course of the week, maintaining a roller-coaster pattern.
Financial analyst Michael Pachter from Wedbush estimated that the sale achieved an average share price of $28.50, coinciding with a significant sell-off observed during a Youtube livestream hosted by meme stock leader Roaring Kitty last Friday. The livestream had a notable impact on GameStop’s stock, leading to a 40% drop after the company unexpectedly released its quarterly earnings report ahead of schedule.
During the livestream, Roaring Kitty, also known as Keith Gill, reiterated his investment thesis without introducing any new rationale behind his substantial stake in GameStop. Gill emphasized that he lacked institutional backers and that his disclosed GameStop positions were his sole investments, providing further clarity on his strategy.
Pachter’s assessment of GameStop resulted in an underperform rating and a 12-month price target of $11, significantly lower than the previous day’s closing price of $30.49. This significant disparity indicates a divergent perspective on the company’s future performance.