AP – GameStop is considering selling some of its shares, a move that would enable the video-game retailer to capitalise on the massive surge in its stock price this year.
In a filing with the Securities and Exchange Commission (SEC) late Tuesday, the company noted that it has been evaluating since January whether to increase a USD100 million stock offering programme it established through Jeffries LLC in December.
The Grapevine, Texas, company said it has yet to sell any shares via the offering programme, but is weighing doing so to help pay for a multiyear business transformation plan.
GameStop didn’t offer any other specifics about the potential timing or size of a stock sale.
GameStop shares vaulted 1,625 per cent in January as bands of smaller and novice investors communicating on social media hyped up the retailer’s stock in hopes of making big returns at the expense of hedge funds betting the shares would head lower.
The stock was down 17 per cent in midday trading on Wednesday. It’s still up about 700 per cent this year.
In the filing, GameStop acknowledged the stock’s “extreme” volatility this year, noting the price run up has often been “unrelated or disproportionate” to the company’s operating performance. GameStop warned investors that its shares may continue to fluctuate widely.