GameStop shares jump after the Reddit favorite raises $551 million in stock sales

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GameStop‘s stock price climbed in premarket trade on Tuesday after the video game retailer said it sold 3.5 million additional shares, raising $551 million to speed up the company’s e-commerce transformation.

The stock, favored by the Reddit retail trading crowd, jumped 8% in premarket after gaining nearly 12% during Monday’s regular trading hours. Shares are up nearly 800% this year.

GameStop announced the “at-the-market” stock offering at the beginning of April, which was viewed as a way to capitalize on its recent head-turning rally that made Wall Street history.

In late January, a band of Reddit-obsessed retail traders coordinated trades on heavily shorted stocks, created a massive short squeeze in GameStop, whose shares surged 400% at one point. The brick-and-mortar retailer traded at less than $20 a share at the start of 2021.

The company is now in the middle of a shift to e-commerce, spearheaded by activist investor and board member Ryan Cohen, who was Chewy’s co-founder. 

Last week, GameStop announced its CEO George Sherman will step down by July 31. It said the board is leading a search to identify CEO candidates who can accelerate the next phase of the company’s transformation.

The company also hired former Amazon and Google executive Jenna Owens as its new chief operating officer.

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