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

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

Shares of GameStop rose after the video game retailer announced the sale of 5 million additional shares, raising $1.13 billion in capital to accelerate growth.

The stock of the original Reddit-favorite meme rose as much as 12.7 percent on Tuesday after the company announced the completion of its at-the-market equity offering programme, which was first announced on June 9. By midday, the daily gain had reached about 6%. GameStop stated that the proceeds will be used for general corporate purposes, as well as to invest in growth initiatives and maintain a strong balance sheet.

This is GameStop’s second stock sale since the company rose to prominence on Reddit’s WallStreetBets forum, where retail traders aimed to push stock prices higher and squeeze out short-selling hedge funds. In April, GameStop raised $551 million by selling 3.5 million additional shares.

Investors have been encouraged by the moves and have looked past the dilution of their stakes as GameStop used its year-long rally of more than 1,000 percent to accelerate its e-commerce transformation.

The Financial Times reported Tuesday that White Square Capital, a London-based hedge fund, is closing its main fund and returning capital after losing money on bets against GameStop.

GameStop named former Amazon executive Matt Furlong as its new CEO earlier this month.

Other former Amazon executives hired by the company include Jenna Owens, its new chief operating officer; Matt Francis, its first chief technology officer; and Elliott Wilke, its chief growth officer.

GameStop reported lower-than-expected losses per share and revenue that exceeded Wall Street expectations in its fiscal first quarter. According to GameStop, as of May 1, it had paid off its long-term debt and had no borrowings under its asset-based revolving credit facility.

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