November 28, 2023

A shopper carries an Express Inc. bag while walking in the Center City neighborhood of Philadelphia Pennsylvania, the United States on Friday, June 24, 2016.

Charles Mostoller | Bloomberg | Getty Images

Shares in retailer Express fell more than 22% on Thursday after the clothing retailer announced it was selling up to 15 million shares.

Express announced an “on the market” offering that could represent more than 22% of the outstanding shares. This type of offering means that the newly issued shares will be sold at market prices from time to time. Its advantage is that Express has control over when and how much inventory is offered.

The huge sell-off comes after the stock rose more than 35% on Wednesday, as part of a meme stock-trading frenzy that also propelled stocks of AMC Entertainment, GameStop, BlackBerry, and Bed Bath & Beyond.

Express stocks were up nearly 110% over the past month. The so-called meme stocks, which are generally shunned by Wall Street, are hailed by retail investors on online forums like Reddit’s WallStreetBets.

Roxanne Meyer, managing director of MKM Partners, told clients that daily trading volumes of Express shares are still well above historical levels, fueled by Reddit speculation.

Express’s shares jumped early Thursday morning after the retailer reported better-than-expected business results for the first quarter. Its business was said to have reached a tipping point after Easter as more consumers were vaccinated and states began lifting Covid-related restrictions. People also returned to the stores and bought casual and work-related clothing.

Express said in the press release announcing its stock offering that it plans to use the net proceeds from the stock sale for general corporate purposes, which could include paying back debt or investing in e-commerce.

Last year, in the midst of the Covid pandemic, Express was on the watch lists of many analysts as a retailer that could be heading for bankruptcy. However, the company managed to find additional funding outside of a judicial reorganization to keep its business afloat and weather the health crisis.

AMC also said Thursday that it plans to sell more than 11 million shares, which caused the cinema chain’s shares to collapse.

Express shares are up more than 615% since the start of the year.

This story evolves. Please check again for updates.