The videogame retail chain GameStop announced on Monday that it plans to sell hundreds of millions of dollars worth of stock to take advantage of the rise its shares have experienced in the market thanks to the bet of retail investors coordinated through Reddit.
In a statement, the U.S. company said it will sell up to 3.5 million shares, which at the price at which the shares closed in the last trading day could bring it around $670 million.
Gamestop explained that it plans to use the proceeds from the sale to accelerate its transformation and strengthen its balance sheet.
The Texas-based video game retailer has had a crazy year on Wall Street, with its shares going from trading around $4 in May 2020 to more than $400 at the end of January and up to the $190 they closed at last Thursday.
Today, following its announcement, the stock opened with losses of around 12% on the New York Stock Exchange.
Gamestop became this year a symbol of a new movement of retail investors, who coordinated through the Internet and ignoring market trends, bet on this stock and shot up its price.
This forced large Wall Street funds that had bet short against GameStop to take heavy losses, in what many small investors hailed as a defeat for the market giants.
From its late January highs, Gamestop shares then plunged as low as $40, but then staged a major recovery.
For fiscal 2020, ended January 30, GameStop posted a net loss of $215 million, a 52% improvement over the previous year and positive results in the fourth quarter, albeit with lower sales than analysts expected.