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Meme Stock GameStop Surges After Raising $933 Million Through Share Sales

GameStop shares soared 14% on Tuesday after the struggling video game retailer announced it had raised $933 million by capitalizing on a surge in its stock earlier this month.

In the first two weeks of May, GameStop’s shares skyrocketed nearly sixfold, driven in part by the reappearance of Keith Gill, also known as “Roaring Kitty,” a key player in the 2021 retail trading craze. However, the stock has since lost 70% of its value, closing on Friday with a market value of $5.82 billion.

The company confirmed it raised $933.4 million through the completion of its previously disclosed offering of 45 million shares. The funds are intended for general corporate purposes, including potential acquisitions and investments.

“GameStop can leverage its share surge as long as the price remains high and they have an at-the-market offering on file,” noted Art Hogan, chief market strategist at B. Riley Wealth. “They still face significant challenges before their share price reflects their actual business performance.”

Earlier this month, GameStop projected its first-quarter net sales to decline to between $872 million and $892 million, down from $1.24 billion the previous year.

Tuesday’s share price increase could impact short sellers betting on the company’s decline. According to analytics firm Ortex Technologies, about 20.5% of GameStop’s publicly available shares were in short positions.

Similarly, AMC, another meme stock, recently completed a $250 million “at-the-market” share sale program.

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