I am ignorant on finance. But if GameStop had considered to offer new shares, wouldn’t some investment bank have to agree to buy them on an exorbitant price, or could they just sell them on open market?
They could also sell big lots to banks which planned to immediately flip them to retail investors.
No big bank would touch this. An ATM offering had potential, but the amount of exposure this incident had meant that this was a risky grey area - legally and ethically.
Hire a little bank. Indemnify them.
Also, the big banks gladly sold AMC and American Airlines stock.
Of course, I'm speculating. But what else explains it?
The reasons in the article.