Yesterday, RC Ventures filed a Schedule 13D documenting its position in GameStop (NYSE:GME) as of June 10. The investment firm is managed and owned by GameStop CEO Ryan Cohen.
As of June 10, Cohen and RC owned 36.84 million shares of GME stock, which remained unchanged from his last update on May 22. The update before that, accurate as of June 9, 2023, also showed ownership of 36.84 million shares.
However, GameStop’s shares outstanding have increased significantly during the past few weeks as a result of two at-the-market (ATM) offerings totaling 120 million shares. That has resulted in Cohen’s ownership percentage of GME declining, despite his position remaining constant.
As of June 9, 2023, Cohen had a 12.1% ownership stake in the company. However, as of May 22 of this year, his ownership had fallen to 10.5%. Finally, as of June 10, 2024, his ownership is now down to 8.6%.
GME Stock: CEO Ryan Cohen’s Ownership Falls as a Result of Dilution
Last June, there were 304.75 million GME shares outstanding. In May, that figure increased to 351.18 million shares. Then, as of this month, there were 426.21 million shares outstanding. That equates to a 40% increase in shares outstanding in just one year.
Cohen’s lower ownership percentage isn’t a negative signal from the CEO, but rather a result of company corporate actions. The big question is whether GameStop can sustain the amount of dilution that it has incurred.
GameStop’s recent ATM offerings haven’t had much of an effect on GME stock. Typically, share offerings result in a lower stock price in the near term due to dilution.
The first offering was announced on May 17 and GME is up by over 20% since then. The second offering was announced on June 7. These offerings resulted in gross proceeds of $3.07 billion.
GME stock’s strength is attributable to the return of Roaring Kitty, who has rallied shareholders to support the company with cryptic meme posts and frequent screenshot updates of his GameStop position. As of June 10, Roaring Kitty’s GME stake totaled 5 million shares worth $124.15 million and 120,000 $20 call options expiring on June 21.
On the date of publication, Eddie Pan 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.
