Despite GameStop's stock being driven as high as $483 a share in the wild Reddit-fueled rally at the end of January, the retailer itself was poorly positioned to take advantage of the unprecedented event. The company was unable to sell off any stock when prices peaked due to regulatory concerns, according to sources cited by Reuters.
Theoretically, GameStop could have raised much-needed revenue through a stock sale when its stock peaked at over $400 a share, raising revenue towards its $216 million debt and investing in an ecommerce pivot--but it didn't. Sources familiar with the matter said that GameStop explored the possibility of selling off stock during the rally, but ultimately decided not to.
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Now Playing: What The Heck Is Going On With GameStop
The biggest issue was that GameStop was essentially in the middle of a fiscal quarter, and hadn't yet been able to report financial results for that quarter. Thanks to U.S. Securities and Exchange Commission regulations, the company could have found itself in hot water had it sold off shares without updating investors on its latest earnings figures.
With the stock rally happening over such a short timeframe, it would have been incredibly difficult for GameStop to pull together and release the required documentation in time to capitalize on it. The same wasn't true of other companies caught up in the frenzy like AMC, which managed to raise a much-needed $1.2 billion thanks to Reddit investors' interest in the stock.
GameStop's stock has since dropped to around $50 a share, though this figure is still well above the company's stock price at the start of the year--and above most analysts' estimation of the stock's true value. We'll have to wait and see if the company's internal struggles make it into any of the five movies currently planned about the event.