Retailer's Rebound: $1.3 Billion Financing Boosts Struggling Chain

GameStop shares surge after $1.3 billion convertible debt offering

NEW YORK: GameStop Corp's shares surged nearly 15% on Monday after the video game retailer announced a $1.3 billion convertible debt offering, a move that aims to provide the company with additional liquidity and flexibility to execute its strategic priorities.

The company said it will use the net proceeds from the offering to strengthen its balance sheet, reduce debt, and fund potential strategic initiatives, including potential acquisitions and investments in new technologies and businesses.

The convertible debt offering is expected to close on or about March 24, subject to customary closing conditions. The company has granted the initial purchasers of the notes a 13-day option to purchase up to an additional $195 million in principal amount of the notes.

GameStop's shares have been under pressure in recent months as the company faces increased competition from online retailers and the shift towards digital game sales. The company has been working to transform its business model to focus more on e-commerce and digital sales.

The company's CEO, George Sherman, said in a statement that the offering will provide GameStop with the financial flexibility to execute its strategic priorities and drive long-term growth.

"We are pleased to have the opportunity to access the capital markets and strengthen our balance sheet, which will enable us to continue to invest in our business and drive long-term growth," Sherman said.

The offering comes as GameStop faces pressure from activist investors to improve its performance and increase its stock price. The company's shares have fallen more than 60% over the past year, making it one of the worst-performing stocks in the S&P 500.