GameStop’s record Q1 profits have only gone so far, as the meme stock-prone gaming retailer has turned to its lenders to wipe away $400 million in debt coming due in 2030 and another $1 billion due in 2032.
The company privately negotiated an agreement to swap about $1.4 billion of outstanding convertible senior notes for shares of its Class A common stock, avoiding the need to touch its cash, according to its press release Monday.
Downsizing has also allowed the retailer to preserve cash by slashing expenses. GameStop closed hundreds of stores last year and the year before, and has been shrinking its overseas operations.
This year GameStop CEO Ryan Cohen has been pushing for an acquisition of eBay, and the retailer last month disclosed that it had amassed a 10% stake in the marketplace giant. EBay has rejected the outreach, calling a May offer for $56 billion “neither credible nor attractive.”
Investors found the debt swap less than attractive on Monday, sending GameStop shares down on the news.
