Well, it’s here:

GameStop Corp. GME -3.90% said it could raise hundreds of millions of dollars from stock sales in the coming months, as the videogame retailer turns to public markets to help support its turnaround plan.

The company said Monday that it would sell up to 3.5 million shares, adding that the timing and amount of any stock sale would involve various factors.

Plans for issuing more shares were in their most recent annual report, as I called out here on March 25th.

3.5 million shares would be about 5% of the current shares outstanding. With GameStop’s share price still 60x above where it was a year ago, I would expect further capital raises. If they can use the money wisely to fund a turnaround to e-commerce, this could wind up being a positive for shareholders in the long term, but in the short term any dilution is likely to hit the stock’s price.

GameStop has failed at turnarounds before, and I’m skeptical they can do it right this time. If not, shareholders are left with diluted shares in a company that’s hit a dead end.

For more on GameStop, check out these posts:

• Is GameStop the Next Blockbuster?
• Are GameStop Shareholders About to Be Diluted to Oblivion?
• GameStop Short Squeezes Are Over

Photo: “Retail GameStop” by ccPixs.com is licensed under CC BY 2.0