After circling the drain just a year ago, Gamestop has managed to cash in on its recently skyrocketed meme stock for Scrooge McDuck piles of real cash, pulling in $1.1 billion dollars.
“[The company] has completed its previously announced ‘at-the-market’ equity offering program (the ‘ATM Program’),” GameStop announced today in a new SEC filing. “The Company ultimately sold 5,000,000 shares of its common stock under the ATM Program and generated aggregate gross proceeds before commissions and offering expenses of approximately $1,126,000,000.”
That $1.1 billion is in addition to the 3.5 million shares of additional stock the company sold back in April for roughly $551 million. What will GameStop do with its new meme-fueled war chest? “GameStop will use net proceeds from the ATM Offering for general corporate purposes as well as for investing in growth initiatives and maintaining a strong balance sheet,” the company announced in a press release. It could also use just a fraction of it to give all of the struggling employees at its remaining stores a modest raise instead of spending it on golden parachutes for existing executives.
GameStop did not immediately respond to a request for comment.
The company’s billion plus windfall over the last few months comes after a convoluted chain of events at the start of the year that included a Reddit-fueled trading frenzy pushing GameStop’s stock price to record-breaking and utterly ridiculous new highs. While much of that drama, which at one point involved Congressional hearings on Capitol Hill, has since died down, the gaming retailer has slowly made moves to overhaul its senior corporate leadership.
In April, Reddit hero and former pet food tycoon Ryan Cohen was named the new chairman of GameStop’s board of directors. The company has also been filling its c-suite with former Amazon managers. All of this is aimed at transforming the brick and mortar company into a predominantly online company, though it remains to be seen how exactly that will happen and whether it will be as successful as the meme stock’s legion of boosters hopes it will be. The cornerstone of GameStop’s business for years has been used games, which have steadily been replaced by digital sales.
Still, if your plan involves spitting in the face of long-term market trends, a couple of extra billion lying around can’t hurt.