GameStop announced on Tuesday that it has submitted a filing for an offering of up to 20 million shares, resulting in a decline of over 10% in its stock during after-hours trading. This drop follows the company's report of a decrease in second-quarter revenue, attributed to consumers increasingly opting for online purchases.

The retailer, which has been a focal point of the "meme stock" trading phenomenon, is facing challenges with falling sales in its core business of selling new and pre-owned video game discs, as the market shifts towards digital downloads, game streaming, and online shopping.

GameStop indicated that the funds raised from this offering will be utilized for general corporate purposes, which may encompass acquisitions and investments aligned with its investment strategy.

Additionally, the company is in the process of identifying locations for closure and anticipates shutting down more stores than in previous years, as noted in a statement on Tuesday, echoing comments made by CEO Ryan Cohen in June.

Earlier this year, Cohen highlighted the fierce competition present in the gaming console market.

Analysts at Wedbush indicated on Friday that GameStop is encountering a nearly insurmountable challenge in its efforts to return to growth, particularly as streaming services continue to expand. The company appears to lack a coherent strategy for entering new, potentially lucrative markets.

GameStop's stock has experienced considerable fluctuations this year, particularly after online stock influencer Roaring Kitty made a return to X.com following a three-year absence, posting a cryptic meme that many interpreted as a positive indicator for the company.

Roaring Kitty played a significant role in the 2021 surge of GameStop and other so-called meme stocks, which were driven by retail investors on Reddit's WallStreetBets forum.

For the quarter ending August 3, GameStop reported revenues of $798.3 million, down from $1.16 billion the previous year. Analysts surveyed by LSEG had anticipated revenues of $895.7 million.

The company's net income was reported at $14.8 million, or 4 cents per share, a notable improvement from a loss of $2.8 million, or 1 cent per share, in the same quarter last year. This positive outcome was aided by a 16% reduction in selling and administrative expenses during the quarter.