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GameStop Completes At-The-Market Equity Offering Program

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GameStop Corp. (NYSE: GME) announced the completion of its 'at-the-market' equity offering program. Initially disclosed on May 17, 2024, the company filed a prospectus supplement with the SEC to offer and sell up to 45 million shares of common stock. The maximum number of shares was sold, resulting in gross proceeds of approximately $933.4 million before commissions and expenses. GameStop plans to use the net proceeds for general corporate purposes, including acquisitions and investments.

Positive
  • Completion of the ATM Program, raising approximately $933.4 million in gross proceeds.
  • Potential for strategic acquisitions and investments with the new capital.
Negative
  • Dilution of existing shareholders due to the issuance of 45 million new shares.
  • Uncertainty on how the net proceeds will be effectively utilized to generate shareholder value.

GameStop's completion of its 'at-the-market' equity offering program (ATM Program) marks an important financial milestone. The company raised $933.4 million through the sale of 45 million shares. This significant influx of capital can provide essential liquidity, which might be used for strategic acquisitions, investments, or other corporate purposes. However, issuing new shares dilutes existing shareholders' equity, potentially impacting the stock price negatively in the short term. The market's reaction will depend on how effectively GameStop utilizes these funds to generate future returns.

From a financial perspective, this move can be seen as a double-edged sword. While the capital raise strengthens the company's balance sheet, the resultant dilution could pressure the stock. Investors will need to monitor GameStop's use of proceeds, looking for strategic moves that enhance long-term value.

The ATM Program's completion and the raised capital reflect confidence in GameStop's ability to attract investor interest. The retail investor community, which has shown significant enthusiasm for GameStop, played a important role in this successful capital raise. The influx of funds can be pivotal for GameStop as it continues to transform its business model from a traditional retail approach to a more diversified one, possibly venturing into new domains like digital assets or e-sports.

However, the effectiveness of this capital usage is essential. If the funds are deployed in high-growth areas, it could improve the company's market position and future prospects. Conversely, if the investments do not yield expected returns, it could lead to a loss of investor confidence.

GRAPEVINE, Texas, May 24, 2024 (GLOBE NEWSWIRE) -- GameStop Corp. (NYSE: GME) (“GameStop” or the “Company”) today announced that it has completed its previously disclosed “at-the-market” equity offering program (the “ATM Program”).

GameStop disclosed on May 17, 2024 that it filed a prospectus supplement with the U.S Securities and Exchange Commission to offer and sell up to a maximum amount of 45,000,000 shares of its common stock from time to time through the ATM Program. The Company sold the maximum number of shares registered under the ATM Program for aggregate gross proceeds (before commissions and offering expenses) of approximately $933.4 million.

GameStop intends to use the net proceeds from the ATM Program for general corporate purposes, which may include acquisitions and investments.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS - SAFE HARBOR

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are based upon management’s current beliefs, views, estimates and expectations, including as to the Company’s industry, business strategy, goals and expectations concerning its market position, strategic and transformation initiatives, future operations, margins, profitability, sales growth, capital expenditures, liquidity, capital resources, expansion of technology expertise, and other financial and operating information, including expectations as to future operating profit improvement. Forward-looking statements are subject to significant risks and uncertainties and actual developments, business decisions, outcomes and results may differ materially from those reflected or described in the forward-looking statements. The following factors, among others, could cause actual developments, business decisions, outcomes and results to differ materially from those reflected or described in the forward-looking statements: economic, social, and political conditions in the markets in which we operate; the competitive nature of the Company’s industry; the cyclicality of the video game industry; the Company’s dependence on the timely delivery of new and innovative products from its vendors; the impact of technological advances in the video game industry and related changes in consumer behavior on the Company’s sales; interruptions to the Company’s supply chain or the supply chain of our suppliers; the Company’s dependence on sales during the holiday selling season; the Company’s ability to obtain favorable terms from its current and future suppliers and service providers; the Company’s ability to anticipate, identify and react to trends in pop culture with regard to its sales of collectibles; the Company’s ability to maintain strong retail and ecommerce experiences for its customers; the Company’s ability to keep pace with changing industry technology and consumer preferences; the Company’s ability to manage its profitability and cost reduction initiatives; turnover in senior management or the Company’s ability to attract and retain qualified personnel; potential damage to the Company’s reputation or customers' perception of the Company; the Company’s ability to maintain the security or privacy of its customer, associate or Company information; occurrence of weather events, natural disasters, public health crises and other unexpected events; risks associated with inventory shrinkage; potential failure or inadequacy of the Company's computerized systems; the ability of the Company’s third party delivery services to deliver products to the Company’s retail locations, fulfillment centers and consumers and changes in the terms the Company has with such service providers; the ability and willingness of the Company’s vendors to provide marketing and merchandising support at historical or anticipated levels; restrictions on the Company’s ability to purchase and sell pre-owned products; the Company’s ability to renew or enter into new leases on favorable terms; unfavorable changes in the Company’s global tax rate; legislative actions; the Company’s ability to comply with federal, state, local and international laws and regulations and statutes; potential future litigation and other legal proceedings; the value of the Company’s securities holdings; concentration of the Company’s investment portfolio into one or few holdings; the recognition of losses in a particular security even if the Company has not sold the security; volatility in the Company’s stock price, including volatility due to potential short squeezes; continued high degrees of media coverage by third parties; the availability and future sales of substantial amounts of the Company’s Class A common stock; fluctuations in the Company’s results of operations from quarter to quarter; the restrictions contained in the agreement governing the Company’s revolving credit facility; the Company’s ability to generate sufficient cash flow to fund its operations; the Company’s ability to incur additional debt; risks associated with the Company’s investment in marketable, nonmarketable and interest-bearing securities, including the impact of such investments on Company’s financial results; and the Company’s ability to maintain effective control over financial reporting. Additional factors that could cause results to differ materially from those reflected or described in the forward-looking statements can be found in GameStop's most recent Annual Report on Form 10-K and other filings made from time to time with the SEC and available at www.sec.gov or on the Company’s investor relations website (https://investor.gamestop.com). Forward-looking statements contained in this press release speak only as of the date of this press release. The Company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by any applicable securities laws.

Contact

GameStop Corp. Investor Relations
(817) 424-2001
ir@gamestop.com


FAQ

What is the significance of GameStop's ATM Program completion?

GameStop completed its 'at-the-market' equity offering program, resulting in approximately $933.4 million in gross proceeds.

How many shares did GameStop sell through the ATM Program?

GameStop sold 45 million shares of its common stock.

What will GameStop do with the proceeds from the ATM Program?

GameStop intends to use the net proceeds for general corporate purposes, including acquisitions and investments.

What is the impact of the ATM Program on GameStop shareholders?

The issuance of 45 million new shares resulted in dilution of existing shareholders' equity.

When did GameStop announce the completion of its ATM Program?

GameStop announced the completion on May 24, 2024.

GameStop Corp.

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gamestop is a family of specialty retail brands that makes the most popular technologies affordable and simple. we are a global retailer of multichannel video game, pop culture collectibles, consumer electronics and wireless services, operating more than 7,500 stores in 14 countries across europe, canada, australia and the united states. gamestop is committed to delivering innovation to consumers anywhere, anytime and any way they want it. whether looking for new or pre-owned, digital or physical video game titles, the latest in video game hardware or accessories or consumer electronics, gaming and technology enthusiasts are invited to discover and enjoy their favorite products in one of gamestop's welcoming retail environments. the company's global family of video game related brands include gamestop; eb games, an international electronics retailer; micromania, france's leading video game retailer; kongregate, a popular web and mobile gaming site; and game informer® magazine, the worl