It’s been a rather eventful few months for investors in meme stock GameStop (NYSE:GME). From the return of Roaring Kitty to social media, to a surprise early earnings release and another share issuance from GameStop’s management team, GME stock has traded in a rather wild range.
The stock is down another 5% today as investors await the company’s upcoming annual shareholder meeting on June 13. At his meeting, investors will be asked to elect five directors, vote on executive compensation and stockholder proposals, and attend to other administrative matters (as is typical with such meetings).
That said, this annual meeting could be among the more contentious, with shareholder questions around dilution and the prospect of additional equity issuance likely to remain in focus.
Let’s dive into what investors are watching ahead of this key event.
GME Stock Down Ahead of Annual Shareholder Meeting
It’s worth noting that Ryan Cohen, GameStop’s CEO, now has a significantly smaller stake in GME stock than he did a year prior. Recent reports have highlighted that disclosures indicate Cohen now owns roughly 8.6% of GameStop’s outstanding shares, compared to 10.2% a year prior.
Now, most of this decline in the CEO’s stake could be tied to a 75 million share at-the-market offering that was completed yesterday. This offering raised more than $2 billion in capital for the video game retailer (a positive). However, each existing investor now has a smaller stake in the company — that’s called dilution. For now, it appears Cohen is willing to take a smaller slice of the pie with more icing on top (cash is likely to be key to any transformation the company looks to make moving forward).
The question many have is if Ryan Cohen and his team have what it takes to use the more than $2 billion in cash GameStop just raised to pivot in the right direction or if this capital will be destroyed by the cash burn of the company’s existing operations. We’re likely to find out more from the actual meeting itself, so mark June 13 on your calendar!
On the date of publication, Chris MacDonald did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
