Video game retailer GameStop, the meme "stonk" of the century so far, is back in the news with a planned "at the market" secondary share offering.
Following the company's announcement, shares of GameStop Inc. (NYSE: GME) tumbled more than 12.5% before rebounding. Shares were trading around $180 today at lunchtime on the East Coast...
Now here's the deal… GameStop's secondary share offering aims to raise capital by increasing its number of outstanding shares by 3.5 million. Its plan is to use the generated cash to accelerate its "corporate transformation."
Basically, with more shares available to the public, prices will go down. And, yes, this may attract a fresh flock of would-be meme stock investors hoping to buy the dip.
But for current GameStop holders, more shares in circulation decreases one's ownership percentage, making each share held less valuable.
So what's the play here? Should you buy in? And is there any reason to be bullish following the GameStop offering?
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