June 22, 2021
GameStop, the world’s largest standalone video game retailer, continues to defy Wall Street sensibilities despite middling financials.
The Grapevine, Texas-based chain said it generated about $1.1 billion in revenue from “at-the-market” (ATM) sales of 5 million shares of common stock. An ATM offering is a type of stock sale utilized by publicly traded companies in order to raise capital over time.
GameStop, which said it would use the proceeds for “general corporate purposes as well as for investing in growth initiatives and maintaining a strong balance sheet,” initiated the sale on June 9.
Meanwhile, GameStop reported a net loss of $215 million for the fiscal year ended Jan. 31. Revenue declined 22% to $5 billion.
Since the beginning of the year, the chain has become caught up in a social media frenzy pitting crowdsourcing individual day traders against established Wall Street hedge funds. Under a David vs. Goliath media spotlight, individual traders working together were able to skyrocket GameStop’s stock valuation, resulting in significant fiscal losses for hedge funds that had bet the shares would decline in value.
Abetting the situation was the arrival of Chewy.com founder Ryan Cohen, a populist star among individual traders, who initially bought a lot of shares of GameStop when prices were low, i.e. $4 to $5 per share, and then proceeded to help jumpstart the stock in valuation.
Soon Cohen was named to the board and then chairman. That meant the arrival of new senior executives, including former Amazon executive Matt Furlong as new CEO, with a push to jumpstart e-commerce revenue. Meanwhile, previous CEO George Sherman is exiting with a golden parachute worth about $100 million thanks to GameStop shares hovering around $214 per share in pre-market trading — compared with about a $3.77 per share low within the past fiscal year.