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GameStop’s shares rose in positive territory after dropping double digits at one point on Monday after the video game retailer said it could sell up to $ 1 billion in additional shares after a historic squeeze fueled by Reddit.
GameStop’s last trade was 1.7% higher, at $ 194 per share. Earlier in the day, GameStop saw its shares drop by as much as 14%, to around $ 164.81 each, after announcing an offer of up to 3.5 million shares. The company said it plans to use the funds to further accelerate the transformation of e-commerce, as well as for corporate purposes in general and further strengthen its balance sheet.
The offer is seen as a way for the retailer to capitalize on its jaw-dropping recent rise, sparked by a group of Reddit-obsessed retail traders who targeted heavily shorted stocks. GameStop rose 400% in a week in January, to more than $ 400 per share, amid the massive short-term squeeze.
Earlier this year, GameStop, a traditional retailer, traded at less than $ 20 a share.
GameStop is in the midst of a technology and e-commerce transition led by activist investor and board member Ryan Cohen, who co-founded Chewy. The company hired former Amazon and Google executive Jenna Owens as its new chief operating officer.
In a separate statement on Monday, GameStop said its total global sales increased about 11% in the first nine weeks of fiscal year 2021 over the same period last year. For the five-week period ending April 2, total global sales grew 18% year-over-year, the company said.
Two weeks ago, the company reported worse-than-expected results in the fourth quarter, which did not achieve as much financial results as the top ones. However, GameStop said its e-commerce sales jumped 175% in the last quarter and accounted for more than a third of its sales in the period.