GameStop jumps 9% after the original meme stock cashes in again with $1 billion share sale

A GameStop store is pictured in New York on January 29, 2021.

Carlo Allegri | Reuters

GameStop shares rose after the video game retailer said it sold five million additional shares and raised $ 1.13 billion in capital to accelerate growth.

Reddit’s original Favorite Meme stock rose 9% in pre-hours trading Tuesday after the company announced the completion of its June 9th stock offering program, as well as investing in growth initiatives and maintaining a strong balance sheet.

This is the second stock sale GameStop has made since the company became a star on Reddit’s WallStreetBets forum, where retailers sought to drive stock prices higher and crowd out hedge fund short sales. GameStop sold 3.5 million additional shares in April, raising $ 551 million.

Investors were encouraged by the moves and looked past the dilution of their stakes as GameStop used its monstrous rally this year to accelerate its e-commerce transformation. The stock is up over 960% in 2021.

White Square Capital, a London-based hedge fund, is closing its main fund and returning capital after suffering losses from betting against GameStop, the Financial Times reported Tuesday.

Earlier this month, GameStop named former Amazon executive Matt Furlong as its new CEO. The company also hired several other former Amazon executives, including Jenna Owens, its new chief operating officer; Matt Francis, its first chief technology officer; and Elliott Wilke, their chief growth officer.

For the first fiscal quarter, GameStop reported lower-than-expected losses per share and revenue that exceeded Wall Street estimates. Mai said GameStop had paid off its long-term debt and was running out of loans under its asset-based revolving credit facility.

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