sale, capitalizing on a newly arrived and fervent army of online investors. The video game retailer has taken center stage among a handful of companies that have as meme stocks. The phenomenon has pitted smaller of beleaguered companies against large institutional investors who have shorted shares of those companies or bet that shares in those companies will fall.
So far, the smaller investors are taking home significant gains, though certainly more extensive and more sophisticated investors have since jumped aboard for the ride. Shares of GameStop Corp., based in Grapevine, Texas, just outside of Dallas, are up more than 1,000% this. Another meme stock, the movie chain AMC Entertainment, is up 2,300% this . Before becoming stars in retail investor chatrooms, both companies were under severe pressure, but for different reasons. AMC, already wrestling with thin margins, was hammered by a global pandemic that shut down its theaters and flipped the switch on incoming revenue almost overnight. have threatened to turn it into a relic like another once-ubiquitous chain, Blockbuster Video.
But GameStop is taking full advantage of its surgingto raise desperately needed cash. On Tuesday, the company said it sold 5 million shares in the at-the-market offering or every share it said it might put on the market.
It was the second cash haul for GameStop thisduring the run-up in its stock price. In April, the company said it would sell up to 3.5 million shares in a separate offering. That offering also sold out, and it .
The most recent capital raise neared $1.13 billion.
Shares of GameStop, which could be had for about $20 early this, we’re selling for close to $213 Tuesday afternoon after rising another 9% at the opening bell on word of the capital raise. In addition to raising capital, GameStop is also shifting direction to catch up to the changing technology that threatened the company’s existence, namely that gamers are discs from places like GameStop.
And a lot of new talent has arrived this year to make that happen.
, the co-founder of Chewy, an online pet supply company, revealed that he had compiled a massive stake in GameStop and began agitating for change. Earlier this , the company reshaped its executive leadership team and board, making Cohen its chairman. Under new leadership, the company is attempting to move aggressively into digital sales and earn a loyal following in ways other than its stores, which have generated enormous revenue for almost two decades.