This mass sell-off follows the 3.5 million shares of stock the company sold back in April for $551 million USD. During a press conference, the company announced that “GameStop will use net proceeds from the ATM Offering for general corporate purposes as well as for investing in growth initiatives and maintaining a strong balance sheet,”
On the risk of bankruptcy and trading below four dollars per share in 2020, an unprecedented Reddit-induced short squeeze instigated by subreddit forum r/WallStreetBets and Elon Musk sent GameStop stock soaring more than 1000 percent. After much drama and a highly volatile period of rallies and dips since then, the stock is now resting at around $220 USD per share, leaving behind a trail of aggravated short-selling hedge funds with estimated losses of over $6 billion USD.
Earlier this month, GameStop hired a range of former Amazon executives to lead the company including Matt Furlong as its new CEO, Jenna Owens as its new Chief Operating Officer, and Matt Francis as its first Chief Technology Officer. Having paid off all its long-term debt at the start of May, time will tell whether the company can restructure its business and live up to expectations.