After a strong first quarter marked by a lot of noise around the stock, the gaming chain will now go out on a money hunt. The stock fell on Wall Street after the news.
The gaming chain Gamestop announced on Monday that they will sell up to 3.5 million shares “from time to time” by selling shares in the market.
Through this, the company will raise up to one billion dollars, equivalent to 8.5 billion kroner, in fresh capital.
It all still comes with a chin. If the company sells all the shares at the closing price before Easter, the company will only raise 670 million dollars, equivalent to 5.7 billion kroner. Thus, at the time of writing, there is little indication that the ceiling of one billion dollars will be reached.
Gamestop states that they will use money raised from the sale of shares to “further accelerate the transformation”, as well as for general corporate purposes.
The announcement contributed to the decline in the Gamestop share on Monday. Shortly after Wall Street opened, the stock fell 10.68 percent. By the time the stock exchange closed on Monday, the fall had moderated to down 1.91 percent.
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Sales growth in the first quarter
The news comes on the same day as the company has presented sales figures for the first quarter. These figures are again divided into different periods.
In the first nine weeks of the financial year, the company experienced sales growth of 11 per cent, compared with the same weeks the year before. The five weeks in March ended at the same time with a sales growth of 18 percent compared to the previous year.
The reason why the company has divided the quarter into periods is the impact of the pandemic. Last year, the pandemic created problems related to shutdowns from March, while this year it particularly affected the first nine weeks of the year, Gamestop states.
Norwegian small investors suffered a 60 percent loss after the Gamestop crash
Gamestop ended up on everyone’s lips earlier this year when a group of small investors on the Reddit forum WallStreetBets were given responsibility for parts of a sharp rise in the share.
The reason for the massive purchases is said to have been that several hedge funds had shorted large amounts of shares in the company. When they had to buy back the shares to realize the losses, this led to further buying pressure on the share, which sent it straight to heaven.