John Smith | Corbis News | Getty Images

GameStop shares fell double digits on Monday after the video game retailer announced it was selling up to $ 1 billion in additional shares after a historic Reddit short squeeze.

GameStop’s stock fell 14% to around $ 164.81 apiece after announcing a stock offering of up to 3.5 million shares. The stock was last trading around 7% at $ 178 per share. The company intends to use the proceeds to further accelerate its e-commerce transformation as well as for general corporate purposes and to further strengthen its balance sheet.

The offer is seen as a way for the retailer to capitalize on its recent staggering rally, sparked by a group of Reddit-obsessed retailers aiming for sharply shortened stocks. GameStop rose 400% to over $ 400 per share in a week in January.

GameStop, a brick and mortar retailer, was listed at less than $ 20 per share earlier in the year.

GameStop is in the midst of a technology and e-commerce transition led by activist investor and board member Ryan Cohen, the co-founder of Chewy. The company hired former Amazon and Google CEO Jenna Owens as its new chief operating officer.

In a separate release on Monday, GameStop announced that total global revenue in the first nine weeks of fiscal 2021 was up approximately 11% year over year. In the five-week period ending April 2, total global sales increased 18% year over year.

Two weeks ago, the company reported worse-than-expected fourth-quarter results that were missed in the upper and lower ranges. However, GameStop announced that e-commerce sales rose 175% in the most recent quarter, accounting for more than a third of sales for the reporting period.