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GameStop Shares Drops, Company to Offer Additional $1B Stock Sales

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GameStop - Investorsking

Reddit “meme stock” favorite GameStop announced it would sell up to 3.5 million shares and released early sales figures.

Following the surge in GameStop shares in 2021, the company makes plans to sell up to $1 billion worth of additional shares in one of the largest at-the-market equity offerings ever announced for the retail sector.

It was reported that the fund raised from the sales of the shares could help the video game retailer company to finance its digital transformation and strengthen its balance sheet.

The video game retailer erased an early 14% drop to close 2.4% lower in New York at $186.95. Jefferies will manage the offering of up to 3.5 million shares, according to a statement, and proceeds will be used to further accelerate its corporate transformation.

GameStop’s offering plan is 10 times larger than one it announced in December with Jefferies, according to data compiled by Bloomberg.

However, the potential dilution to shareholders is about the same since the retailer was worth $13.4 billion at Thursday’s close, roughly 10 times its value at the end of 2020.

The at-the-market program is also different than traditional secondary offerings as it enables the company to sell shares directly into the open market, allowing it to take advantage of an influx of individual investors.

“It makes sense to convert some of the stock into cash, which could then be used to accelerate the transformation effort,”

“Cash would be a more attractive currency than stock to complete an acquisition to accelerate the transformation.” Said Telsey Advisory Group analyst Joe Feldman in an email.

GameStop shares have moved sideways over recent weeks and nearly 14 million shares changed hands on Monday, that’s less than half what’s been seen on average over the past month.

It’s reported that traders will keep a close eye on trading volume this week as the nature of the offering means the company can complete the stock sale at their discretion.

As part of a corporate overhaul spearheaded by activist investor and board member Ryan Cohen, the company has brought in a number of new executives including a chief growth officer and chief technology officer, adding technology experience to its team to help move the company away from its brick-and-mortar business.

In a separate statement on Monday, GameStop released preliminary sales results for the first nine weeks of fiscal 2021. Total global sales increased about 11% from the same period a year ago, jumping 18% in March after a 5.3% rise in February.

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Nigerian Stock Exchange

Stock Investors Lose Another N11 Billion on Wednesday

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Nigerian Exchange Limited - Investors King

The Nigerian Exchange Limited (NGX) extended decline on Wednesday as sentiment remained weak across the Exchange.

Investors exchanged 155,773,059 shares valued at N1.510 billion in 3,256 transactions during the trading hours of Wednesday, in contrast to 184,442,908 shares worth N2.343 billion that exchanged hands in 3,809 transactions on Tuesday.

Market value depreciated by N11 billion to N20.243 trillion on Wednesday, further down from N20.254 trillion it closed on Tuesday. While NGX All-Share Index dipped by 0.05 percent to 38,852.69 index points.

Transcorp Hotel Plc led gainers with N0.45 or 10 percent. Followed by Pharm-Deko Plc’s N0.16 or 9.88 percent gain. See the details below.

Top Gainers

Symbols Last Close Current Change %Change
TRANSCOHOT N 4.50 N 4.95 0.45 10.00 %
PHARMDEKO N 1.62 N 1.78 0.16 9.88 %
CONOIL N 22.35 N 24.55 2.20 9.84 %
CORNERST N 0.49 N 0.53 0.04 8.16 %
NEM N 1.90 N 2.00 0.10 5.26 %

Top Losers 

Symbols Last Close Current Change %Change
VERITASKAP N 0.23 N 0.21 -0.02 -8.70 %
UCAP N 9.00 N 8.55 -0.45 -5.00 %
CHAMS N 0.22 N 0.21 -0.01 -4.55 %
ACCESS N 8.90 N 8.60 -0.30 -3.37 %
JAPAULGOLD N 0.47 N 0.46 -0.01 -2.13 %

Top Trades

Symbols Volume Value
UNIVINSURE 19040500.00 3808100.00
UBA 18778552.00 143097682.80
ZENITHBANK 11757422.00 268830997.45
GTCO 10015581.00 271262745.25
UCAP 8519588.00 74569386.55

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Bonds

Investors Renewed Confidence In Nigeria’s Economy Leads to Oversubscribed Eurobond

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Bonds- Investors King

The Debt Management Office (DMO) revealed that the $3 billion Eurobond offer was heavily oversubscribed, noting that investors were ready to invest $12.2 billion.

Consequently, the government decided to increase its initial offer value from $3billion to $4billion.

According to a statement on Tuesday night by the Debt Management Office (DMO), investors from, Nigeria, Europe, Asia and America demanded $12.2 billion for the notes.

“This exceptional performance has been described as ‘one of the biggest financial trades to come out of Africa in 2021 and an excellent outcome”, said the DMO in a statement.

“The size of the Order Book and the quality of investors demonstrate confidence in Nigeria”, the DMO said.

Nigeria opened its order book for the bond offering on Tuesday, aiming to issue the bond next week, according to a notice to investors.

The country issued the debt in tranches of three tenors.

It raised $1.25 billion for seven years at a yield of 6.125 percent and sold a 12-year bond at 7.375 percent to fetch $1.5 billion. A 30-year tranche of $1.25 billion was sold at 8.25 percent

The government had arranged a two-day call with investors last week and on Monday, with the DMO saying that the bond would be priced following the meetings.

The notice was set for Sept. 28 for the bond settlement, which will be listed on the London and Nigerian Stock Exchanges.

The Eurobonds are part of a government plan to raise 2.343 trillion naira ($5.71 billion) in external financing to help fund spending in 2021 and to partly finance the 5.6 trillion naira deficit.

“The long tenors of the Eurobonds and the spread across different maturities are well aligned with Nigeria’s Debt Management Strategy, 2020 – 2023”, the DMO said.

“Since the Eurobonds were issued as part of the New External Borrowing in the 2021 Appropriation Act, the raising of USD4 billion through Eurobonds provides a significant amount of funds to finance projects in the Act, thus contributing to the implementation of the 2021 Appropriation Act”, it added.

Nigeria picked JPMorgan, Citigroup, Standard Chartered and Goldman Sachs as international bookrunners, and local firm Chapel Hill Denham on the forthcoming Eurobond issue

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Bonds

Nigeria Opens Order Book For $3B Eurobond

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Eurobonds - Investorsking

Nigeria opened the order book for a $3 billion Eurobond offering on Tuesday, aiming to issue the bond next week, according to a notice to investors seen by Reuters.

The country is aiming to issue the debt in tranches of three tenors – a seven-year at a yield of 6.5 percent, a 12-year bond at 7.75 percent and a 30-year at up to 8.625 percent.

The government arranged calls last week and on Monday with global and local investors ahead of the planned issue.

The debt office has said the meetings will precede pricing for the bond to raise up to $3 billion but not more than $6.2 billion.

The notice was set for Sept. 28 for the bond settlement, which will be listed on the London and Nigerian Stock Exchanges.

The Eurobonds are part of a government plan to raise N2.343 trillion ($5.71 billion) in external financing to help fund spending in 2021 and to part finance the N5.6 trillion deficit.

Nigeria picked JPMorgan, Citigroup, Standard Chartered and Goldman Sachs as international bookrunners and local firm Chapel Hill Denham on the forthcoming Eurobond issue.

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