Two months after Reddit day traders took GameStonk ( $GME ) shares to surprising heights in a massive short squeeze, the video game retailer is finally trying to cash in. On Monday, it announced plans to issue up to 3.5 million new shares worth $650m via an “at-the-market” offering, or ATM.
The structure allows the issuer to raise cash bit by bit over the course of months or years. This is reasonable opportunism. Despite a pullback, GameStop shares are still up 900 per cent this year.
If successful, the share sale will equate to 5 per cent of outstanding stock. For the army of diamond handed faithfuls, the dilution is a small price to pay in exchange for turnround plans. Ryan Cohen, co-founder and former chief executive of online pet supply retailer Chewy (The new Pets.com), is leading the push to transform the brick-and-mortar retailer into an online-first operation.
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