GameStop shares soar after the corporate raised over $ 1 billion for inventory gross sales

A GameStop store is pictured in New York on January 29, 2021.

Carlo Allegri | Reuters

GameStop shares rose after the video game retailer said it sold 5 million additional shares and raised $ 1.13 billion in capital to accelerate growth.

The original Reddit favorite meme stock rose up to 12.7% on Tuesday after the company announced the completion of its stock offering program, first published on June 9, on the stock exchange. In the afternoon the daily gain was 10%. GameStop said it will use the proceeds for general corporate purposes, as well as investing in growth initiatives and maintaining a strong balance sheet.

This is the second stock sale GameStop has made since the company became a star on Reddit’s WallStreetBets forum, where retailers aimed to drive stock prices soaring and crowd out hedge fund short sales. GameStop sold 3.5 million additional shares in April, raising $ 551 million.

Investors were encouraged by the moves and looked past the dilution of their stakes as GameStop used its monstrous rally this year – more than 1,000% – to accelerate its e-commerce transformation.

White Square Capital, a London-based hedge fund, is closing its main fund and returning capital after suffering losses from betting against GameStop, the Financial Times reported Tuesday.

Earlier this month, GameStop named former Amazon executive Matt Furlong as its new CEO. The company also hired several other former Amazon executives, including Jenna Owens, its new chief operating officer; Matt Francis, its first chief technology officer; and Elliott Wilke, their chief growth officer.

For the first fiscal quarter, GameStop reported lower-than-expected losses per share and revenue that exceeded Wall Street estimates. Mai said GameStop had paid off its long-term debt and was running out of loans under its asset-based revolving credit facility.

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