GameStop taps the retail piggy bank again with 75M share offering
After its worst quarter for sales since 2005, GameStop is enjoying its best quarter for raising money.
The brick-and-mortar gaming retailer pre-announced quarterly results this morning and revealed plans to sell an additional 75 million in shares.
The offering’s prospectus includes the message that the company “did not experience any material changes in our financial condition” from February 4 through June 6 – which seems a little odd, as GameStop raised nearly $1 billion by selling 45 million shares during May’s meme stock mania.
The May sale was a 15% dilution, and the average selling price of the shares was roughly 30% below where the stock was trading when the offering was announced. Today's announced offering is about a 20% dilution; and if we pencil in an average selling price about 40% below where the stock was trading prior to this offering, Ryan Cohen & Co would have another $2.5 billion in cash on their balance sheet to play with.
The quarterly results released were brutal but expected, as all the figures were near the midpoints of the preliminary estimated ranges put forward in May.
The stock has lost about a quarter of its value since the news of this offering dropped, with traders also awaiting the Roaring Kitty YouTube livestream at noon ET today.
