GameStop raised more than $1 billion in its latest stock sale, capitalizing on a newly arrived and fervent army of online investors.
The video game retailer has taken center stage among a handful of companies that have come to be known this year as meme stocks. The phenomenon has pitted smaller investors who snap up shares of beleaguered companies, against large, institutional investors who have shorted shares of those companies, or bet that shares in those companies will fall.
So far, it’s the smaller investors that are taking home big gains, though certainly larger and more sophisticated investors have since jumped other countries for the ride.
Shares of GameStop Corp., are up more than 1,000% this year. Another meme stock, the movie chain AMC Entertainment, is up 2,300% this year.
GameStop is taking full advantage its surging stock price to raise desperately needed cash. The company said Tuesday that it sold 5 million shares in the at-the-market offering, or every share it said that it might put on the market.
It was the second cash haul for GameStop this year during the run-up in its stock price. In April the company said that it would sell up to 3.5 million shares in a separate offering. That offering also sold out and it raised about $551 million.
The most recent capital raise neared $1.13 billion. Shares of GameStop, which could be had for about $20 early this year, were selling for close to $213 Tuesday afternoon after rising another 9% at the opening bell on word of the capital raise.
GameStop, in addition to raising capital, is also shifting direction in a bid to catch up to the changing technology that threatened the company’s existence, namely that gamers are downloading games rather than buying discs from places like GameStop.