GameStop Corp. (NYSE: GME) saw its shares drop by over 25% today after announcing plans to sell additional stock and reporting a decline in first-quarter sales. The company has entered into an open market sale agreement to offer and sell up to 45 million shares of its Class A common stock.
The announcement detailed that Jefferies will act as the sales agent under the financing.
GameStop’s common stock has experienced significant volatility in price and trading volume in recent days. This follows GameStop surging dramatically early this week after “Roaring Kitty,” the influencer behind the 2021 short squeeze, posted online for the first time in nearly three years. His post, featuring an image of a gamer leaning forward intently, quickly amassed 63,000 likes in 13 hours. GameStop’s stock soared 74.4% on Monday following the post, peaking at a 110% increase and experiencing multiple trading halts due to volatility.
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In addition to the stock sale announcement, GameStop released preliminary unaudited financial results for the first quarter ended May 4, 2024. The company expects net sales to range between $872 million and $892 million, a significant drop from $1.237 billion in the same quarter last year. Selling, general, and administrative expenses are anticipated to be between $290 million and $300 million, down from $345.7 million last year.
GameStop also reported an expected net loss of $27 million to $37 million for the quarter, an improvement over the $50.5 million net loss recorded in the prior year’s fiscal quarter. Cash, cash equivalents, and marketable securities are projected to be between $1.073 billion and $1.093 billion, compared to $1.310 billion at the end of the same quarter last year.
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