Gamestop pulls back plan to sell 3.5 million shares
GameStop stock retreated in pre-market trading on Monday after the video game retailer said it could sell up to 3.5 million shares while trying to take advantage of rising prices after a frenzy driven by Reddit group wallstreetbets.
Gamestop store (Image: International Banker)
According to Reuters, the sale of shares would bring the company more than $670 million at Thursday’s closing price of $191.45. The shares rose more than 900% this year and hit $482.95, with retail operators betting against Wall Street hedge funds that had sold the shares.
GameStop said it would use the proceeds from the stock offering to accelerate the change in its business model to e-commerce, a plan that is being led by the main shareholder and board member, Ryan Cohen.
The company said it filed the prospectus for a public offering with the Securities and Exchange Commission (SEC).
The shares were down 13% to $166 in the pre-market. Separately, GameStop said that global sales for the nine-week period ending April 4 increased by about 11%.