GameStop share has dropped by 10% after Reddit-driven name planned a $1 billion stock sale

On Monday, almost all the shares of GameStop have toppled by double digits as soon as the video game retailer has mentioned that it might sell up to almost $1 billion worth of additional shares following a historic Reddit-fueled short squeeze.

Notably, the GameStop stocks have dropped by more than 10% which is around $171 pieces after announcing stocks offering around 3.5 million shares. However, the company mentioned it intends to make use of the proceeds to further accelerate its e-commerce transformation and for general corporate purposes and further strengthening its balance sheet.

However, the offering is viewed as a way for the retailer for capitalizing on its recent jaw-dropping rally prompted by a band of Reddit-obsessed retail traders who have targeted heavily shorted stocks. In January, within a single week GameStop upsurge by 400% which almost above $400 a share. A brick-and-mortar retailer, GameStop traded less than $20 a share at the beginning of the year.

In the middle of a technology and e-commerce transition, GameStop is led by activist investors and board member Ryan Cohen who is Chewy’s co-founder. Now the company has hired the former Amazon and Google executive Jenna Owens who is the new chief operating officer.

On Monday, in a separate release, Gamestop has mentioned its total global sales enhanced around 11% for the first time in the nine weeks of fiscal 2021 from the starting period of the previous year. However, within the five-week period which ended up on 2nd April, total global sales have grown up to almost 18% as per the company.

Well, two weeks ago, the company has reported worse than it had expected fourth-quarter results which missed on the top and bottom lines. On the other hand, GameStop mentioned that it has e-commerce sales that jumped to 175% last quarter and has accounted which is more than a third of its sales in the period.

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