GameStop, the popular video game retailer, recently raised over $2 billion through a successful stock sale. This move came as the company capitalized on a renewed meme rally that was ignited by the comeback of trader Roaring Kitty. The retailer announced that it sold the maximum number of 75 million shares in an at-the-market equity offering, resulting in proceeds of $2.14 billion.
According to GameStop, the funds raised from the stock sale will be utilized for general corporate purposes. This may include making acquisitions or investments to further strengthen the company’s position in the market. Despite the success of the stock sale, the company’s stock price experienced a slight dip of more than 1% in premarket trading on Wednesday.
The shares of GameStop have been on a roller-coaster ride this week, with an 8% increase thus far. Wedbush GameStop analyst, Michael Pachter, estimated that the average share price in the recent sale was $28.50. This coincided with a significant sell-off during a Youtube livestream by Roaring Kitty, a prominent figure in the meme stock movement.
Roaring Kitty, also known as Keith Gill, was a key player in the recent events affecting GameStop’s stock price. Following his Youtube livestream, where he reiterated his investing thesis without offering new insights, the company experienced a 40% drop in share price. Gill disclosed that he had no institutional backers and that his GameStop positions were the only investments he held.
Despite the recent rally and stock sale, Pachter maintains an underperform rating on GameStop. He has set a 12-month price target of $11, which is significantly lower than the closing price of $30.49 on Tuesday. This indicates that, from an analytical standpoint, the outlook for GameStop may not be as positive as the recent events would suggest.
GameStop’s stock sale and the subsequent meme rally have generated significant attention and market activity. However, it remains to be seen how the company will utilize the funds raised and whether it can sustain its recent momentum. The influence of key figures like Roaring Kitty and the assessments of analysts like Michael Pachter will continue to shape GameStop’s performance in the coming months.
Leave a Reply