In a significant blow to GameStop's recent meme-stock rally, the struggling video game retailer announced its decision to sell 45 million shares, marking the end of the surge. The company also revealed its expectation of a 29% decline in first-quarter revenue compared to the previous year.

GameStop's stock had experienced a meteoric rise this week, surging as much as 271%. However, Friday saw a sharp decline, with shares plunging by 29% to $19.70, a considerable drop from the intra-day high reached on Tuesday. The stock was now trading at similar levels to last Friday, erasing all the gains from the meme-stock rally.

The company's plan to sell 45 million shares in an at-the-market offering signaled a potential dilution for existing shareholders. This arrangement allows GameStop to sell shares directly to willing buyers on the open market, with a limit of 45 million shares. AMC Entertainment, another company benefiting from the meme-stock rally, had successfully raised $250 million using a similar share sale agreement.

Unfortunately for GameStop, it appeared that it was too late for the company to capitalize on the recent stock surge, as all gains had already dissipated. In a filing submitted to the Securities and Exchange Commission (SEC), GameStop acknowledged that the extreme price volatility and trading volume did not align with any material changes in its financial condition or operational results.

The company anticipated a decline in first-quarter revenue of approximately 30% year-over-year, projecting a range of $872 million to $892 million. Additionally, GameStop expected a net loss of $27 million to $37 million during this period. These disappointing figures further emphasized the lack of fundamental changes to justify the stock's recent surge.

GameStop cautioned potential investors in its prospectus, warning them of the risk associated with purchasing shares in the current offering. The company stated that investors may face significant losses if the price of its common stock subsequently declines.

As GameStop's meme-stock rally comes to an end, investors and industry analysts observe the impact of recent events on the company's financial outlook and market value. The future of the iconic video game retailer remains uncertain amidst the challenging landscape of the gaming industry.