GameStop Crashes on Wall Street Following Possible Stock Sale Announcement

GameStop Crashes on Wall Street Following Possible Stock Sale Announcement

GameStop is considering increasing the size of a sale of $ 100 million in shares, which it originally announced in December.

Shares of Reddit forum favorite GameStop Corp tumble nearly 18% on Wednesday, a day after the video game retailer said it could raise cash from its meteoric rise in the stock market to fund an expansion of its stock market. online business.

Shares in GameStop have soared almost 900% so far this year as retail investors have acted in coordination on Reddit forums to raise the prices of stocks with heavy volumes of short positions.

The company said Tuesday after reporting its quarterly results that it has been considering since January the possibility of increasing the size of a sale of $ 100 million in shares, which it originally announced in December.

GameStop had previously said it would suspend that sale because it was restricted under US financial regulation, since it had not updated investors on its quarterly earnings.

The share sale program was assigned to Jeffreries, whose consulting unit said Wednesday that it raised the placement price to $ 175 per share, although it left the note on the “hold” paper unchanged.

The target price is much higher than the value assigned by the analyst consensus of $ 25, according to Refinitiv, and marks the first time that a Wall Street trader has aligned its price projections with the current price levels of the papers. by GameStop.

Reditt’s WallStreetBets forum was buzzing about the possibility of another “position throttling,” which led GameStop shares to add up to 2,300% in January, hitting a record $ 483 a piece of paper.

At 10:21 a.m., GameStop shares were down 17.2% to $ 150.31.

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