Dave & Buster's Entertainment (PLAY -0.22%) still needs cash. The restaurant and gaming chain announced on Monday that it has struck a deal to sell over $100 million worth of its stock in exchange for a capital infusion. The offering could grow to a maximum of $115 million within the next 30 days, the company said.
Dave & Buster's stores have been closed since March due to the COVID-19 pandemic, and management has already announced plans to push cash outflow to less than $50 million per week during the shutdown. Today's stock issuance demonstrates that the financial strain is still mounting.
The chain plans to use the proceeds to "strengthen its balance sheet," executives said in a press release, "principally as necessitated by the effects of the COVID-19 outbreak on its business."
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The share offering pressured the stock early on Monday, reflecting the diluted earnings outlook and the relatively low price of the stock sales. Yet the extra capital will give CEO Brian Jenkins and his team more flexibility to deal with the operating pressures they've seen in recent weeks and are likely to endure through at least the fiscal second quarter.
