> Happily, GameStop does have an ATM offering going. It put it in place on Dec. 8, 2020, when the stock was at about $16.35. The way these things work is that GameStop disclosed that its bank could sell stock—up to $100 million worth—“from time to time” at GameStop’s request “consistent with its normal trading and sales practices”; it did not disclose any particular schedule, and has not yet reported if any shares have been sold, or how many, or when. So I don’t know if GameStop had sold the whole $100 million before Friday’s wild run, or if it had any stock left over to sell; if it had any left over, I don’t know if it sold it all on Friday. I hope it did! [1]
On the other hand, that may have been extremely lucky. When Hertz tried to issue more stock in June, the SEC objected so it never happened -- as it was too likely the buyers would be purchasing essentially worthless shares. [2]
[1] https://www.bloomberg.com/opinion/articles/2021-01-25/the-ga...
[2] https://observer.com/2020/06/hertz-car-rental-bankruptcy-sto...
The problem is shareholders suing for securities fraud. That the people who bought at the top are now shareholders. The company has a fiduciary duty to them. If they issue new shares and sell them, that lowers the price. Even if everyone agrees that the price doesn't make sense and issuing new shares is actually good for the company (the price will drop less), the company actively did something the shareholders probably weren't giving fair warning about.