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Investing.com – GameStop (NYSE:GME) shares fell 12% Monday on fears that the video game retailer’s proposed $1 billion fund raising plan will dilute current shareholders.
GameStop will sell up to 3.5 million shares, milking the Reddit-led meteoric rise in its price in the last few months.
It all started in January when a group of enthusiastic Reddit forum followers, ‘WallStreetBets’, pushed GameStop higher to force out big institutions who were heavily short the stock. The subsequent short squeeze led to many running for cover. GameStop shares have risen by over 6000% in a year.
The company has since been trying to effect a turnaround, appointing a new management along with a committee to oversee its transition to an ecommerce platform. The share sale plan is to fund the transformation.
