Key Takeaways: GameStop Stock Tumbles as Company Plans to Issue 45 Million New Shares

GameStop stock is taking a nosedive on Friday as the retailer announced plans to issue up to 45 million new shares, causing shares to tumble 25% in intraday trading. This news comes as GameStop also released initial projections for its first-quarter financial performance, which fell below analyst estimates.

The company filed with the Securities and Exchange Commission (SEC) on Friday to sell the new shares, bringing GameStop’s total shares on the market to about 351.19 million. The proceeds from the sale will be used for “general corporate purposes” such as investments and acquisitions, potentially netting the company just under $1 billion at its current share price.

In addition to the share issuance, GameStop also released its first-quarter preliminary results, forecasting net sales of $872 million to $892 million for the 13 weeks through May 4. These figures are below analyst projections of $1 billion, with the company also expecting a larger net loss than estimates.

This news comes after a roller-coaster week for GameStop, which saw the meme stock more than double in value over Monday and Tuesday following the return of key figure “Roaring Kitty.” However, shares reversed course on Wednesday and Thursday, falling 19% and 30%, respectively, with Friday’s news sending shares even further down.

As of 11 a.m. on Friday, GameStop shares were down 25% to $20.74, erasing nearly all the gains made earlier in the week. Investors will be closely watching how the stock performs in the coming days as the company navigates these latest developments.