[ad_1]
GameStop has considered capitalizing on the recent Reddit-fueled rally in its stock price – but regulatory concerns have kept the retailer from pulling the trigger, according to a new report.
The Texas-based video game chain weighed in on the possibility of selling new stocks as novice traders on Reddit’s WallStreetBets forum raised their stock prices in their war on short hedge funds, Reuters reported Thursday. .
GameStop has reportedly withheld issuing shares even though it filed documents with the SEC in December to sell up to $ 100 million in shares. He did not exercise that option amid the recent market craze, according to Reuters.
Such a sale could have raised hundreds of millions of dollars that GameStop could have used to pay off its heavy debt, which stood at $ 216 million as of October 31, according to the report.
But GameStop ultimately concluded that the timing of the rally created too many potential regulatory and logistics headaches, according to Reuters, which cited three anonymous people familiar with the matter.
The company should have published preliminary earnings information before the due date to make a stock offering under Securities and Exchange Commission rules.
But GameStop’s last fiscal quarter was drawing to a close as its shares peaked at $ 483 in the last week of January, and there were no plans to release its earnings report for the three-month period for several weeks. additional, the news agency reported.
To complicate matters further, the SEC said it would examine how companies sold stocks to capitalize on the “Reddit rally” and asked companies to give investors more information on potential risks, the company said. report.
GameStop shares were down around 3.5% to $ 49.39 as of 11:56 a.m. Thursday, about triple their price when the company filed in December, but down significantly from the rally’s peak. Reddit.
GameStop did not immediately respond to a request for comment Thursday.
[ad_2]
Source link