Benzinga - by Shanthi Rexaline, Benzinga Editor.
Editor’s Note: The size of the offering has been corrected to 45 million shares.
Shares of GameStop Corp. (NYSE:GME) plunged hard in premarket trading, signaling that the stock could be headed for a third straight session of losses.
The video game retailer released preliminary first-quarter results, anticipating revenue between $0.872 billion and $0.892 billion. This represents a significant decline from the prior year’s quarter of $1.237 billion. Additionally, GameStop expects a loss of $27 million to $37 million, narrower than the $50.5 million loss reported a year ago. Notably, the revenue estimate falls short of analyst consensus expectations of $1.05 billion.
GameStop also anticipates a decrease in cash, cash equivalents, and marketable securities compared to the year-ago period, estimating this range to be between $1.073 billion and $1.093 billion, dropping from $1.310 billion.
Separately, GameStop filed a prospectus with the SEC for an “at-the-market” offering, allowing them to sell up to 45 million common shares. The company intends to utilize the net proceeds from this offering for general corporate purposes, potentially including acquisitions and investments.
The company also said in the prospectus it would offer preferred Stock, depository shares, warrants, stock purchase warrants, units, and subscription rights.
This announcement shouldn’t come as a surprise for those following GameStop closely. Market analysts anticipated such a move after the stock experienced a surge earlier this week, likely fueled by a post from Keith Gill (better known as “Roaring Kitty”), a central figure in the original meme stock frenzy of early 2021.
In premarket trading, the stock fell 22.30% to $21.50, according to Benzinga Pro data.
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