GameStop is planning to issue additional shares following a decline in second-quarter revenue, attributed to consumers shifting towards online purchases over traditional stores.
The company announced that the proceeds from the sale of 20 million shares will be used for various corporate purposes, including potential acquisitions and investments.
Based on a closing price of $23.45 per share, the sale is expected to generate $479 million in cash, before deductions, adding to their existing $4.2 billion cash reserve.
In response to the changing market dynamics, GameStop, a key player in the 2021 meme stock phenomenon, is focusing on cost-cutting measures and closing underperforming stores.
The company reported a second-quarter revenue of $798.3 million, a drop from $1.16 billion in the same period last year. Net income for the quarter was $14.8 million, a significant improvement from the net loss of $2.8 million in the previous year.
Following the announcement, the company’s shares declined by 3.3 per cent in after-hours trading.
