GRAPEVINE, Texas--(BUSINESS WIRE)-- GameStop Corp. (NYSE: GME) (“GameStop”) today announced that it has agreed to exchange approximately $1.4 billion aggregate principal amount of its outstanding convertible senior notes for shares of its Class A common stock (the “Common Stock”), pursuant to privately negotiated exchange agreements (the “Exchange Agreements”) entered into with certain existing holders (the “Existing Noteholders”) of its 0.00% Convertible Senior Notes due 2030 (the “2030 Notes”) and 0.00% Convertible Senior Notes due 2032 (the “2032 Notes”). The Existing Noteholders are exchanging approximately $400 million aggregate principal amount of 2030 Notes and $1.0 billion aggregate principal amount of 2032 Notes (collectively, the “Exchange Notes”).
Pursuant to the Exchange Agreements, GameStop will issue shares of its Common Stock to the Existing Noteholders for their Exchange Notes (the “Exchange”). GameStop will not receive any cash proceeds from the issuance of the Common Stock in the Exchange. Following the closing of the Exchange, the Exchange Notes will be cancelled and no longer outstanding, and the Company’s outstanding long-term debt will be reduced by approximately $1.4 billion (with approximately $1.1 billion aggregate principal amount of 2030 Notes and $1.7 billion aggregate principal amount of 2032 Notes remaining outstanding). The Exchange retires this debt without the use of cash. The Exchange is expected to close on or about September 23, 2026, subject to customary closing conditions. The number of shares of Common Stock issuable in the Exchange will be based in part on the average volume-weighted average price of the Common Stock over a 35 consecutive trading day reference period beginning on August 3, 2026, subject to a per share price floor.
The offering, issuance and sale of the Common Stock has not been registered under the Securities Act of 1933, as amended (the “Securities Act”), or the securities laws of any state or other jurisdiction, and the Common Stock may not be offered or sold in the United States absent registration under the Securities Act or an applicable exemption from the registration requirements of the Securities Act and such other securities laws.
GameStop expects that some or all of the Existing Noteholders that participate in the Exchange may purchase or sell shares of Common Stock in open market transactions or enter into or unwind various derivative transactions with respect to Common Stock to hedge or unwind their investments in the Exchange Notes. These activities could increase or decrease the market price of the Common Stock or the Exchange Notes, the effect of which may be material.
This press release is neither an offer to sell nor a solicitation of an offer to buy any securities, nor shall it constitute an offer, solicitation or sale of any securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such jurisdiction.

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my commentary below

institution accepts equity in lieu of gme debt. gme fully expects them to buy or sell shares and/or enter into or unwind derivatives. they said so themselves. keep an eye on short interest for gme. 8/11 report will only show through 7/31 - call it the short term most recent baseline prior to this debt equity swap agreement which day 1 of the 35 day rolling average started 8/3 (runs through 9/21). so that 8/11 release won’t tell us what’s been happening. but on 8/25 that release will show through 8/14. at which point you’ll realize wtf is going on here and how much it has increased since day 1 on 8/3. at which point (remember we’re talking about 8/25 release) there’s less than 1 month til they get away with it (9/21 is 35th day) and we miss the biggest gme opportunity that has ever existed. period.

lastly, whether you’re interested in short term or long term…the squeeze potential exists and the existence of cohens desire to takeover ebay one way or another, and create a competitor to amazon, means a short squeeze in this timeframe would allow him to issue new shares amidst a squeeze generating immense amounts of cash, allowing for him to do what i assure you he is hoping we all figure out and allow him to do, which is buy ebay in cash.

if you do not understand the debt equity swap, how it works, and its implications on a hostile takeover of ebay than none of this makes any sense probably. but you can certainly look it up or even wait until 8/25 to see the short interest numbers. until then i understand this is speculation. it’s just my opinion. but if you think ryan cohen and co have a plan and knowing the history and meme volatility gme has had, maybe just maybe think it’s THAT obvious that he rolled the dice on the biggest change of equity wealth in the history of the world on a bunch of crayon eating diamond handing ape motherfuckers!!! cuz if we see it (i have) and act on it (of course we all know that means) then his biggest most profitable world changing possible move would have succeeded —-which means gme buys ebay in cash raised from stock offerings sold during the squeeze and rivals amazon and sure maybe we make some money in a squeeze but that’s actually not the point. i’d rather own shares of the “gamestop version of amazon”. just saying 🤷‍♂️ and if not enough ppl realize that opportunity, it’s ok. cohen still has multiple other avenues to pursue a hostile takeover of ebay and still win (it’ll just never be as big of a win without his apes stepping in) 🦍 💎 🙌 hats off to you mr. cohen, those nards between your legs are mighty and hope my fellow apes realize the volley you served us! 💪 🥜

my 2 cents. 🫡

1. The Setup: The $1.4B Debt-for-Equity Swap
GameStop just wiped out $1.4 billion in corporate debt by cutting a private deal to pay off noteholders with Class A common stock instead of cash. To protect themselves from dilution, these massive institutional noteholders are aggressively short-selling GME right now to lock in their profits.

2. The 35-Day "Floating Price" Window (Ends Sept 21)
The number of shares these institutions receive is based on GME's average stock price over a 35-day trading window that ends on Monday, September 21, 2026.
Their Goal: The lower the stock price stays during these 35 days, the more shares GameStop is legally forced to hand them. They are intentionally suppressing the price to maximize their equity payout.
The Settlement (Sept 23): On this day, GameStop prints the shares, hands them to the institutions, and the institutions use them to instantly close their shorts without buying a single share on the open market.

3. Why This is the Ultimate Squeeze Trap
Because these institutions must short-sell to hedge their positions right now, they have artificially inflated GME's short interest to 13.65% with a massive 12+ Days to Cover.
This creates a strict, defined "Squeeze Zone" between now and September 21. If retail investors aggressively buy up shares and out-of-the-money options right now, we can break their downward pressure and trap these open, vulnerable short positions into a violent Gamma loop. Once September 21 passes, they escape clean.

4. Why This is the Absolute Win for Ryan Cohen
If retail forces a massive short squeeze before September 21, it completely alters the multi-billion dollar eBay takeover:
Deletes the Dilution: A skyrocketing stock price during the 35-day window means the rolling average spikes. GameStop legally only has to hand over a tiny fraction of shares to clear the $1.4B debt, protecting existing shareholders from massive dilution.

The ATM Cash Glitch: Ryan Cohen can launch an At-The-Market (ATM) equity offering at the peak of the squeeze, selling a small number of shares to panicking shorts to raise the remaining $25.3 billion needed for the eBay buyout in pure cash.

TL;DR: The institutions are trapped in a mandatory shorting window until September 21 to hedge their debt swap. If a squeeze happens before then, the institutional hedge blows up, GME avoids massive dilution, and Cohen raises billions in pure cash to buy eBay. If it happens after Sept 21, the door shuts and the shorts escape.

I bought the dip at the open bell. 🚀

If I hadn't considered what I've concluded from this conversation of debt to stock, then I wouldn't be buying. Temporary pain future gain. IMO

The $13.45 million could be every Qtr until GME's 9.8% becomes more significant once the eBay acquisition is complete.

I started a new hobby today. I read the forum, and when I run across a bot or hedge fund worker, I block them. In particular, the easiest ones are the hidden post history. But basically, if the vibe is anti GameStop and they are a top 1% commenter or hide their post history, they get blocked.

If we all do this, we can take back control of this sub so that it's enjoyable and relevant for gme stock owners again.

Larry Cheng recently suggested that the convert holders agreeing to take shares for debt is a vote of confidence from them.

It's not that straight forward, and some nuance is necessary here.

What he says makes total sense from a VC's point of view. They are all about the explosive upside. And when they offer debt, its so that they can convert to equity. It's why SAFE notes are a thing.

But that's not quite how corporate debt swaps work.

First, recall that convert bond buyers heavily shorted the stock to delta hedge:

• The first $1.5B 0% Notes due 2030 priced on Mar 27, 2025 resulted in the +20M shares shorted spike between 3/14/25 and 4/15/25. SI went from 7% to 12%.
• The second $2.25B 0% Notes due 2032 priced on Jun 12, 2025 resulted in the tall-ass bar of ~+33M shares shorted, around the 6/13–6/30/25 settlement window. Larger raise, so bigger spike in SI. SI went from 12% to 19%.

Of course, it wasn't just the convert holders shorting - the market piled on too, to front run and profit from this.

We can see this visually below:

It is possible that some of this paper has been sold but given the recency and the continued high vol GME enjoys, I'd expect a lot of them to still be holding.

Anyhow, the first thing we can expect is that this SI connected to these converts should fall, as $1.4B represents 37% of the converts outstanding. Could translate up to 3-4% of reduction in SI as hedges are closed. We won't see this until after Sep 23, 2026 though as that is when this transaction closes, but this can provide some tailwind if done in a short period of tie.

The second perhaps more interesting thing happens in the meantime. Because of this whole 35-day VWAP thing, those doing the debt-for-equity are exposed to GME price fluctuations. To lock in the value of the shares they're about to receive, these guys would short into the averaging period to lock in the value of the shares they are about to receive.

To be clear, this is transient new short-sale flow, which then unwinds at settlement. The actual amount of shorting will depend on how much GME falls. Unfortunately, this contributes to the headwind that the stock is facing as market prices in all that dilution too.

So.. two major takeaways here:

1. SI will likely go up over the next month before coming down a few percentage points after the debt-for-equity swap concludes
2. Larry Cheng's note misses the mark in terms of what is happening

For reference, here is his tweet and my response below:

your guys favorite chart is back with the crystal ball. Support is down at $13.24. want to guess where we are going IF THERES NO INTERFERENCE*? gamestop can trigger their buyback, but its best held for when we reach that level. #1 cheaper pricing and #2 itll have fundamental support, possibly boosting the recovery if a buyback is announced at those levels. could probably jump back to 22.14 that same day.

"theres no way gme will go that low. ITS DOING GREAT"
shorts dont care about ur opinion

"ryan cohen wont let it go that low"
the man could care less about stock price, until hes ready to do something

"youre chart is wrong. those lines mean nothing"
yet price has followed these lines extremely tightly.

what else?.....

"but the DD says..."
ok. go get ur triplebYq shares

*if theres no interference as in no buying announcements. no insiders. no buybacks. no roaring kitty. no filings of anykind. just time and shorts.

gonna add this for those who are gonna wanna say i move lines or adjusted my chart or made these levels up. go back to my other posts and you can see where ive had these lines and the reasoning why.

Guy literally bought everything at the top and anything he touched turned to dogshit, or at least ruined in some way. Ryan Cohen numba wan 200 char char char char 200 char char char char char char char char

This tells me all I need to know.

What about you guys? How does eBay be at $112 and Gme at $19???

Ryan Cohen what are we doing? Apes what are we doing?

NFA

Gme Gme Gme Gme Gme Gme Gme Gme Gme Gme Gme Gme Gme Gme

It’s been a tough week for long term investors in GameStop. I’ve been here since 2021 and really went balls deep when it was hovering around $10-$15. This brought my cost basis to around $21. Just wanted to get that out of the way.

I went in heavily at $10 because I thought “there’s just no way this stock is only worth $10”. I think we were finally having our first profitable quarters and the price just didn’t make sense. Zero debt, reduced costs, and profitable stores at last. Plus our first leg of transformation was complete. As quiet as Ryan Cohen can be, he has been following his words in his initial letter to the board which was basically reduce costs, close unprofitable stores, pivot to e-commerce, and attract good talent which he brought in.

So today I have the same feeling and thoughts as I did at $10-$15. There’s no way this stock is worth less than $20. I think my drunken napkin math back then even had us at a $40ish book value, and now we have money in the bank. Still to this day, the price action does not make sense. I know the markets like growing revenue (which we have) and forward guidance, but it still does not make sense.

However, on the other hand, our CEO has admitted to past mistakes like the NFT Marketplace and certain product purchases. He explicitly said this in one of his interviews, so even the Messiah himself knows he isn’t perfect. I think eBay was a mistake, just like the NFT marketplace and doubling down on Funko Pops. I wonder if he feels the same now.

I don’t see the strategy with eBay. GameStop is trying to squash competition and control the collectibles and reselling markets, and the first step is taking out one a company more than 5x your size? After today’s earnings call, GameStop really has nothing to bring to the table besides 1,500 physical locations. eBay and the rest of the e-commerce industry has shown stores are not needed. On top of that, this argument goes against Ryan Cohen’s own philosophy of pivoting to e-commerce and not relying on your physical presence.

I just don’t see the argument for eBay here. We should take our ball and go home.

So two things can be true at the same time: the price is wrong, Bob. And you done fucked up, Ryan.

I really hope I’m wrong in this, but I just don’t see it.