Investing.com -- Shares in GameStop (NYSE:GME) surged in premarket U.S. trading, extending gains made in extended hours on Friday after the video game retailer said it raked in more than $933 million from the sale of 45 million shares.
The company, a darling of retail investors that became a focal point of 2021's run up in so-called meme stocks, has been struggling to address competition to its brick-and-mortar stores from e-commerce rivals. GameStop warned last week that first-quarter net sales will likely drop to between $872 million and $892 million, down from $1.24 billion a year ago.
But, earlier this month, it disclosed plans to carry out a share sale following a renewed spike in its stock price that was spurred on by the return to social media of Keith Gill, who is known online as "Roaring Kitty" or "DeepF------Value."
Gill, whose bullish outlook on GameStop helped propel the sharp increase in the firm's shares in 2021, posted a meme and several video clips. It was his first appearance on social media in about three years.
GameStop's shares more than quadrupled from the end of April to May 14, but had given away about 60% of that uptick as of Friday's close.
The Texas-based group said it would use the proceeds from its most recent share sale for general corporate purposes. It did not disclose the price of the share sale, but the average price was estimated at $20.74 each, Reuters reported, citing its own calculations.
By 05:30 ET (09:30 GMT) on Tuesday, the stock was trading up 20% prior to the opening bell on Wall Street.