GameStop stock tanks as retailer reveals plans of a stock sale

GameStop Corp (NYSE: GME) opened about 20% down on Friday after filing to sell additional shares in an at-the-market offering. 

How many shares does $GME plan on selling?

The video gaming merchandise retailer plans on offering 45 million shares in total. What it plans on doing with the proceeds, however, remains unclear. 

$GME is opting for a stock sale shortly after a brief return of the meme stock craze that saw its shares trade at a high of about $65. But they crashed sharply after the short squeeze and are now trading at $22 and change. 

The massive gain in GameStop stock that lasted hardly for a day materialised after Keith Gill or “Roaring Kitty” made a post on X for the first time since 2021. 

Gill is broadly known as the pioneer of the meme stock phenomenon. 

Why else is GameStop stock down on Friday?

The plan of a share sale is bad news for $GME stockholders as it will dilute their stake in the $6.5 billion company based out of Grapevine, Texas. 

Note that Wedbush Securities analyst Michael Pachter continues to see downside in GameStop stock to about $5.60. His recent research note reads:

Shares of the retail firm are down today also because its management now sees revenue to fall between $872 million and $892 million in the first financial quarter as Invezz reported here. Analysts, in comparison, were at about $1.0 billion.