GameStop (GME.N) announced on Friday that it had raised nearly $933.4 million by selling 45 million shares, which resulted in its shares surging more than 12% after hours.
The struggling video game retailer has been heavily dependent on brick-and-mortar stores, but has faced challenges as customers increasingly turn to e-commerce for purchasing video games and collectibles.
Earlier this month, GameStop revealed its plan to sell shares amidst a retail buying frenzy triggered by the social media resurgence of “Roaring Kitty” Keith Gill.
Gill’s optimistic outlook on GameStop had previously fueled the 2021 meme stock rally.
The recent share sale was structured as an “at-the-market” offering, meaning the shares were sold at the current market price rather than a pre-set price.
The surge in GameStop’s shares, which has made the company emblematic of the retail trading craze, began after Gill posted a meme and several video clips from movies.
The stock more than quadrupled in value from the end of April to May 14 but then lost about 60% of that gain by Friday’s close.
While GameStop did not disclose the exact price at which the shares were sold, Reuters calculations suggest an average sale price of $20.74 per share.
At the time of the announcement, GameStop’s shares were trading at $21.93.
The company stated that the funds from the sale would be used for general corporate purposes, including potential acquisitions and investments.
In a recent update, GameStop indicated that it expects its first-quarter net sales to decline to between $872 million and $892 million, down from $1.24 billion in the same period the previous year.
Similarly, AMC (AMC.N), another favorite among retail investors, completed a $250 million “at-the-market” share sale program last week.