Video game retailer GameStop, the meme “stonk” of the century so far, is back in the news with a planned “at the market” secondary share offering.
Following the company’s announcement, GameStop Inc. (NYSE: GME) shares tumbled more than 12.5% before rebounding. Shares were trading around $180 today at lunchtime on the East Coast.
Now here’s the deal… GameStop’s secondary share offering aims to raise capital by increasing its number of outstanding shares by 3.5 million. Its plan is to use the generated cash to speed its “corporate transformation.”
Basically, with more shares available to the public, prices will likely go down. And, yes, this may attract a fresh flock of would-be meme stock investors hoping to buy the dip.
But for current holders, more shares in circulation decreases one’s ownership percentage, making each share held less valuable.
So what’s the play here? Should you buy in? And is there any reason to be bullish following GameStop’s secondary share offering?
What I really want to dive into is the departure of two GameStop executives in late March: CFO Jim Bell and CCO Frank Hamlin. So just a couple of weeks ago…
If I were a shareholder — which I’m not because I don’t trade degenerate Reddit stocks like GameJunk — what bull case scenario do you have following GameStop’s secondary share offering?
Check out my short video on GameStop’s secondary share offering and the stock’s potential moving forward, and let’s chat about it further.
And as always, leave your thoughts in the comments below. Also don’t forget to subscribe to my YouTube channel to stay up to date with all things trading.
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