goldfortunefafafa| If you like to speculate blindly, buy more! The leading game station of the "Roaring Kitten" concept announced an additional 45 million shares
Source: financial Union
Facing the speculation in the marketGoldfortunefafafaThe "retail speculation" concept leading game Playstation announced plans to issue new shares on Friday, triggering a significant fall in share prices and winning praise from analysts.
Under the guidance of the official release of bearish, the share price of the game station plunged by more than 20% on Friday, and the share price has fallen nearly 70% from this week's high.
Do you like to stir up? Here comes the new stock!
As the starting point for this frenzied hype, Roaring Kitty, a social media account that played a key role in the "retail vs. Wall Street" incident in 2021, revived after a three-year slumber on Monday and posted an outline that appeared to be intended to announce that "serious things are going to start".
(source: X)
What comes to mind with the sleeping memory is the enthusiasm of hype. Shares in PlayStation rose 74% on Monday and 60% on Tuesday. It continued to decline for the next two days, followed by the company's own performance on Friday.
Game Post submitted regulatory documents to SEC on Friday, announcing an additional 45 million common shares in the form of a "market price offering" (commonly known as ATM offering). Upon completion of the full issue, the total share capital of the company will rise to 3.Goldfortunefafafa.5.1 billion shares.
(source: game Station announcement)
Unlike traditional IPO, the announcement of an ATM offering does not mean that the company will issue the 45 million shares immediately. Instead, new shares can be issued step by step and in batches according to current market prices according to market demand and investor interest. Affected by this news, the share price of the game station fell by more than 25% after the opening of trading on Friday, basically close to closing the gap of the 13th jump.
(daily chart of the game station, source: TradingView)
As an additional document for the issuance of new shares, the game station also pre-disclosed the results in the first quarter of this year. Revenue in the first quarter was between $8.72 and $892 million, compared with $1.24 billion in the same period last year, and the market is expected to be about $1 billion. The net loss in the first quarter was between $27 million and $37 million, down from a loss of $50.5 million last year.
Judging from the company's assets, the game station is not short of money. The company expects cash and equivalents to reach $1.1 billion at the end of the first quarter.
Analysts highly praise
As for the behavior of the game station, Peter Atwater, an economics professor at the College of William and Mary, commented that there are usually two times to issue stocks, one is when you have to do it, and the other is when it is too stupid not to issue new shares. If you are Ryan Cohen (CEO), investors have just given you a chance to issue shares at a price much higher than the previous trading price, and it would be foolish not to take advantage of this opportunity.
Ideally, if the game station can really sell all these 45 million shares, it can raise nearly $900 million at the current price. This will further strengthen the company's balance sheet and buy more time for Cohen to reverse its business losses.
In recent years, as gamers' habit of buying physical games is gradually replaced by buying digital versions online, the business of game post stations is in trouble. In March, the company announced layoffs and shop closures, but did not disclose the exact scale.
Michael Pachter, an analyst at Wedbush, said PlayStation is currently unprofitable and is expected to lose $100m a year. They are now in a race to see if they can close stores fast enough to limit losses, but they have no plans to increase revenue or profits, and their core business is declining. Pachter gives the game station a weaker rating than the general trend, with a target price of only $7.