GameStop Corp. (GME) is down on Monday after the company announced it would sell up to 3.5 million shares of its common stock, which is worth up to $1 billion. Shares of GME were down 4% as of 10:50am.
Why GameStop Corp. is Down Monday
GameStop shares fell on Monday after the company announced it would sell up to 3.5 million shares of common stock through an “at-the-market” (ATM) equity offering program. The ATM offering differs from a traditional offering in that it allows GameStop to sell shares directly into the open-market, which in recent times has seen a surge in retail investor interest. In a press release, GameStop stated that the sale would be used to "further accelerate its transformation as well as for general corporate purposes and the strengthening of its balance sheet".
GameStop will use Jefferies LLC as the sales agent for the transaction. Although GME announced that Jefferies would handle a potential offering in December, the company's current offering plan is as much as ten times larger than the one it previously announced.
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GameStop Corp is a U.S. multichannel video game, consumer electronics, and services retailer. The company operates across Europe, Canada, Australia, and the United States. GameStop sells new and second-hand video game hardware, physical and digital video game software, and video game accessories, mainly through GameStop, EB Games, and Micromania stores and international e-commerce sites, including www.gamestop.com, www.ebgames.com.au, and www.micromania.fr. The company has two main business segments: Video game brands and Technology brands. The technology brands segment sells wireless products and services and operates Spring Mobile managed AT&T and Cricket Wireless branded stores, along with the Simply Mac business.
