GameStop Corp. said it raised about $2.14 billion by selling shares. The video game store and meme stock said it might use the money to buy other companies or merge with other companies.
Before the market opened, shares of GameStop GME, +22.80% were down 0.7%. On Tuesday, the stock rose 22.8%, which was the biggest gain since June 6, when it rose 47.5%.
GameStop said on its website on Tuesday that it had sold all 75 million shares that it had promised to sell on June 7, when it also reported earnings that showed a surprise drop in sales.
Also see: Roaring Kitty shows he’s keeping his GameStop position even though the stock is going up.
The business said it had agreed with Jefferies to sell those shares as part of an open-market sale agreement that it already had in place and had used to sell 45 million shares.
Tuesday’s gains came after posts on social media seemed to show that Keith Gill, also known as “Roaring Kitty,” an important trader, had a big stake in GameStop. Some people also said that the rally was due to the fact that the company had stopped selling shares.
“GameStop’s price rise in 2021 didn’t last long, but it was strong and quick enough for some people to make a lot of money if they got out at the top.” A lot of people may want this rally to happen again and have seen Gill’s return as a sign to follow the crowd. This is why there is a lot of interest in buying GameStop shares in its equity offer, according to Russ Mould, director of investments at AJ Bell.
Our firm lowered its price target for GameStop after the sale of shares. “Since GameStop’s stock price closed at $46 on June 6, we thought it would sell at an average price of $40,” Wedbush analyst Michael Pachter wrote in a note that came out Tuesday. Instead, the shares dropped sharply on June 7, following news on Reddit about Roaring Kitty’s (Keith Gill) rambling presentation; they closed that day at $28. We are lowering our price target from $13.50 to $11.00 because the share offering didn’t bring in as much money as we thought it would.
The underperform rating that Wedbush had for GameStop stayed the same. One of the two analysts that FactSet talked to has an underweight rating for GameStop, and the other has a sell rating.
Gill’s most recent mysterious post was made late Tuesday night on X, which used to be called Twitter. The picture from the TV show “The Office” shows Steve Carell as a younger version of his character Michael Scott meeting the late Ken Howard as Ed Truck, who used to be his boss. A “Roaring Kitty” peeks out of Scott’s pocket in Gill’s meme, and the “power button” symbol is placed on top of Truck’s pocket.
The picture of young Michael Scott shaking Ed Truck’s hand is called a “memorable moment” from the TV show “The Office” on the website Know Your Meme. “People have used the picture to talk about how they felt when they met an older person when they were younger,” the website says. Like other Roaring Kitty posts, people on social media were trying to figure out what it meant.
— Roaring Kitty (@TheRoaringKitty) June 12, 2024
Gill came back to social media last month with a lot of mysterious posts on X that used memes from films and TV shows like “Star Wars,” “Braveheart,” “E.T.,” “Seinfeld,” and “Peaky Blinders.” Shares of GameStop, AMC Entertainment Holdings Inc. (AMC, +10.83%), and other companies went through the roof after the trader’s return to social media. Both stocks got a lot of attention during the meme-stock craze of 2021, and Gill played a big role in that.
Gill posted a still picture from the Batman movie “The Dark Knight” on Sunday. The picture showed the late Heath Ledger as the Joker getting ready for the movie’s first scene, a bank heist. The picture that was posted has a cat mask on top of the clown mask that the Joker wears.
— Roaring Kitty (@TheRoaringKitty) June 10, 2024
On Tuesday Roaring Kitty posted a meme based on the children’s cartoon “The Amazing World of Gumball.”
— Roaring Kitty (@TheRoaringKitty) June 11, 2024
On June 2, Gill made a post on Reddit from an account that seemed to show that he had a lot of stock in GameStop. Later posts, including one on Monday afternoon, showed that Gill was still in the job. Gill also showed a screenshot of the same spots on Friday during his first livestream on YouTube in three years, which was watched by a lot of people. During Friday’s livestream, a happy Gill talked about how many memes he’s been getting lately. He said, “I hope you thought some of them were funny.” He called himself a “professional larker.”
