Everyone has a different perspective on Meme stocks, however one thing that does not polarize views is that they are a source of volatility in an otherwise relatively flat market. Today, the usual suspect, GameStop, is once again a bastion of volatility but this time it is not the keyboard warriors who are influencing the markets from the comfort of their living rooms, using their pseudonyms as a mask.
It is actually the actions of GameStop itself that have created a rise in the stock price this morning, as the firm has sold 5 million shares worth a total of $1.13 billion in order to accelerate growth.
GameStop, which is a video game retailer, is synonymous with the bank-breaking short selling activity that happened in January, representing an unprecedented coup by members of social media forum WallStreetBets, which has been concentrating its efforts on influencing the price of what are now known as 'meme stocks', specifically GameStop along with entertainment company AMC, and a view to begin targeting other recently listed, media orientated companies.
This time, however, the volatility caused by GameStop's commercial decision is quite interesting, especially when considering how much the stock has increased in price based on a release of stock and realization of capital to grow the company, when many investors consider its stock to be a frivolous folly.
Today, as the US trading session opened, GameStop announced the completion of its at-the-market equity offering program that was initially disclosed on June 9 this year and has stated that it intends to use the proceeds for general corporate purposes as well as for investing in growth initiatives and maintaining a strong balance sheet.
This represents the second time in which GameStop has sold bulk stock since the short selling debacle back in January. The first time it did so was in April when the firm sold 3.5 million shares, resulting in a capital raise of $551 million, however today's is far higher.
The bullish sentiment is quite surprising given the volatility and community-driven influence that GameStop stock has become synonymous with, and under its new CEO, former Amazon heavyweight Matt Furlong, the company looks to be taken very seriously on the top level publicly listed stage with a hiring spree having taken place, largely resulting in the recruitment of several other senior Amazon executives.
Despite the losses reported in the company's annual return, and the notoriety the company gained as a result of becoming the first meme stock to create outages in banks and brokerage platforms purely because of the words of social media users, the firm remains interesting to investors, and this morning's rally, against all odds, is testimony to that.
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