Catenaa, Monday, August 03, 2026- GameStop shares fell over 12% on Monday, touching a low of $18.96 per share, their lowest intraday level since August 2024.
The move comes after the video game retailer announced plans for a private exchange of $1.4 billion in convertible notes for common stock as a way to pay down its debt without using cash. Investors perceived the move as diluting existing shareholders.
The notes are $400 million of 0.00% converts due 2030 and $1.0 billion due 2032. GameStop receives no cash proceeds from the share issuance.
The exchange cuts long-term debt by roughly $1.4 billion without using cash, leaving about $1.1 billion of 2030 notes and $1.7 billion of 2032 notes outstanding.
The number of shares to be issued depends partly on the average volume-weighted average price over 35 consecutive trading days starting today, subject to a per-share price floor, so the share count will not be fixed until that window closes. The exchange is expected to close on or about September 23.
GameStop also said some or all of the participating noteholders may buy or sell shares in the open market, or enter and unwind derivative positions to hedge or unwind their note investments, and that the effect on the share price could be material.
The stock is down roughly 28% since early May, around the time the company made an unsolicited offer to buy eBay.
The online marketplace eBay rejected the video game retailer’s $56 billion bid. Questions about how GameStop would pay for the deal sent GameStop shares lower.
Investors speculated that the company would need to take on debt and dilute shares by selling stock to raise the funds.
The unsolicited bid that month prompted investor Michael Burry to sell his entire position in GameStop.
