As shares of GameStop (NYSE: GME) soared to almost $400, then dropped before rebounding to a level that currently values the company at over $12 billion, investors wondered why it wasn't taking advantage to raise capital on shares that began the year under $20. Today, the company answered by announcing a stock sale, sending shares down 13.3% as of 9:40 a.m. EDT.
GameStop said in a Securities and Exchange Commission filing that it will raise up to $1 billion by selling as many as 3.5 million new shares of common stock. There's no set schedule for selling the shares, which the company said will be offered "from time to time" using an "at the market" equity offering program. At the current share price of about $170, selling the full allocation would equate to about $600 million in new capital for the company.
Investors aren't happy with the potential dilution, it seems. Shares are falling on the news, even though the company also gave investors some good news on its sales results today.
Source Fool.com