Meme stock GameStop jumps after raising $933 million in share sales

GameStop's stock surged 17% after announcing it raised $933 million from share sales, capitalizing on a market rally. This funding, intended for general corporate uses, comes as the retailer faces challenges from a shift to e-commerce. Despite recent losses, this move could impact short sellers, who are betting on the stock's decline.

GameStop, a brick-and-mortar video game retailer, is facing several challenges in competing with e-commerce firms. One of the main challenges is the shift in consumer behavior, as more customers turn to online platforms to purchase video games and collectibles. This has led to a decline in foot traffic and sales for physical stores. Additionally, the company has been grappling with supply chain issues, which have further impacted its ability to compete in the market. Despite efforts to transform the company into an e-commerce giant, GameStop has struggled to find a long-lasting growth formula. The company has also experienced delivery bottlenecks and challenges in the supply chain, which have persisted even as it closed over 250 stores and used the remaining ones as mini fulfillment centers to support its shrinking e-commerce business5. Overall, the transition from a brick-and-mortar model to an e-commerce model has not been straightforward for GameStop.