posted solid gains Wednesday after the video game retailer made its debut on the
New York Stock Exchange.
GameStop, which sells software for use on video game consoles like Sony PlayStation 2 and Microsoft Xbox, saw its shares jump 11% to $20.10 in its first day of trading. The stock opened at $19.25 after being priced in the middle of its range at $18 a share. Some 9.5 million shares changed hands.
Barnes & Noble
unit raised $325 million in the second-biggest initial public offering this year, according to lead underwriter Salomon Smith Barney. The largest offering came from Loews Corp's Lorillard tobacco unit,
Grapevine, Texas-based GameStop plans to use $250 million of the proceeds from the IPO to retire intercompany debt owed to Barnes & Noble. Barnes & Noble, which fell 43 cents to $31.35 Wednesday, retains a two-thirds stake in the company following the initial sale, in the form of Class B shares.
Operating under the store names GameStop, Babbage's, Software Etc. and FuncoLand, GameStop said holiday sales for the nine-week period ended Jan 10 rose 67% to $427 million while same-store sales increased by 60%.
The company expects to report revenue of about $510 million for the three-month period ending Feb. 2, up from $327 million last year. Operating earnings are slated to be $37 million, compared to $17 million last year. For the fiscal year ended Feb. 2, the firm expects sales to climb to $1.12 billion from $757 million in the previous year.