(Bloomberg) – GameStop Corp fell early Monday after the company said it could sell up to $ 1 billion worth of additional shares in a stock offering program on the market.
Shares of the video game retailer fell more than 15% to $ 160.96 from 7:19 a.m. in New York. According to a statement, Jefferies will manage the offering of up to 3.5 million shares and the proceeds will be used to further accelerate its corporate transformation.
The company signed an agreement with Jefferies in December to sell as much as $ 100 million in stock, according to documentation.
As part of a corporate overhaul by activist investor and board member Ryan Cohen, GameStop, the company has included a number of new executives, including a chief executive officer for growth and chief technology officer, who added the technology-oriented senior executives to his team to move company away of its brick-and-mortar business.
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GameStop announced in a separate statement on Monday the preliminary sales results for the first nine weeks of fiscal 2021, where total global sales increased by about 11% in the same period a year ago. Total world sales rose 18% in March after rising 5.3% in February.
Based in the suburbs of Dallas, GameStop has suffered from a shift in the video game industry to online distribution. With gamers downloading more and more – or at least ordering software and equipment via e-commerce – there is less reason to go to a physical store. The company showed disappointing earnings last month.
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