The Reddit sensation has jumped during Tuesday's trading session following the announcement. GameStop shares are up over 960% this year.
The Grapevine, Texas-based video game retailer plans to use the net proceeds for general corporate purposes, investing in growth initiatives and maintaining a strong balance sheet.
The latest share offering comes after GameStop raised $551 million on a sale of 3.5 million shares in April to help accelerate the company's e-commerce transformation led by Chewy.com founder and newly elected board chairman Ryan Cohen.
Cohen has tapped Amazon veterans Matt Furlong and Mike Recupero to help lead GameStop's transformation as chief executive officer and chief financial officer, respectively.
The company also recently eliminated its long-term debt with the completion of a voluntary early redemption of $216.4 million of its 10.0% senior notes due in 2023.
GameStop narrowed its first-quarter losses to $66.8 million, or $1.01 per share, compared to $165.7 million or $2.57 per share during the same period a year ago. e company's adjusted net loss was $29.4 million, or $0.45 per share, compared to an adjusted net loss of $157.6 million, or $2.44 per share, a year ago.
Meanwhile, net sales for the first quarter increased 25.1% year-over-year to $1.28 billion, compared to $1.02 billion a year ago, overcoming a nearly 12% reduction in the company’s global store base due to "strategic de-densification efforts", and continued store closures across Europe due to the COVID-19 pandemic.
GameStop's meteoric rise this year prompted by the Reddit retail investor-fueled short squeeze back in January has catapulted the company toward membership in the Russell 1000 index. In order to move into the Russell 1000 index, an existing Russell 2000 member would need to have had a market cap exceeding $7.3 billion as of the ranking day of May 7, according to Catherine Yoshimoto, FTSE Russell’s director of product management.
|AMC||AMC ENTERTAINMENT HOLDINGS INC||24.39||-1.05||-4.13%|
GameStop currently qualifies for the Russell 1000 with a $11.97 billion market cap as of the ranking day, while AMC Entertainment Holdings, another high-profile meme stock, was below the ranking day's threshold with a market cap of $4.28 billion.
The Russell's annual rebalancing of its family of indexes will be finalized after the market close on Friday.