GameStop Rises on Completion of $551 Million Stock Sale

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GameStop  (GME) – Get Report shares were rising Tuesday bolstered by the videogame retailer’s previously announced at-the-market equity offering program and social media talk that South Korean investors were throwing their support behind the Reddit-fueled stock.

Shares of the Grapevine, Tex. company were rising 5.4% to $178.01 at last check after jumping about 12% on Monday.

GameStop said after the market closed on Monday that it had finished selling the 3.5 million shares it had previously announced it would be selling, and raised $551 million. The proceeds, the company said, “will be used to continue accelerating GameStop’s transformation as well as for general corporate purposes and further strengthening the Company’s balance sheet.”

Meanwhile, a MarketWatch report said that South Korean investors have joined the Reddit/WallStreetBets group that is backing the company.

This follows a Financial Times story on Sunday that said retail investors who call themselves “ants” have emerged as the dominant force in South Korea’s stock market, accounting for almost 60% of daily turnover. 

Earlier this month, GameStop began a search for a new chief executive as the videogame retailer looks to become more of an e-commerce company.

The company reached an agreement with Cohen’s RC Ventures LLC to re-structure its board and focus on digital sales and not simply “remain a videogame retailer that overprioritizes its brick-and-mortar footprint and stumbles around the online ecosystem.” 

GameStop also announced in April that George Sherman will be stepping down as CEO by July 31.

GameStop said Ryan Cohen, the founder of Chewy.com  (CHWY) – Get Report, will become chairman of the company’s board. Cohen built a stake in the company earlier this year as part of an agreement to re-structure its board and focus on digital sales.

In March, GameStop posted modestly softer-than-expected fourth quarter earnings.

GameStop, as well as AMC Entertainment  (AMC) – Get Report and other companies, saw their shares surge as retail investors have communicated via online chat boards like Reddit’s WallStreetBets to bid up stocks in an effort to force hedge funds and other large investors to abandon their short positions.