GameStop (GME) Issues $450M in New Notes

As previously reported on June 17, 2025, GameStop (NYSE: GME) issued and sold in a private offering $2.25 billion aggregate principal amount of 0.00% Convertible Senior Notes due 2032 (the “Notes”). The Company also granted the initial purchaser of the Notes a 13-day option to purchase up to an additional $450 million aggregate principal amount of Notes (the “Additional Notes”). On June 23, 2025, the initial purchaser elected to exercise in full such option (the “Greenshoe Exercise”), and on June 24, 2025, the Company issued $450 million aggregate principal amount of Additional Notes.
In connection with the Greenshoe Exercise, the Company received gross proceeds of $450 million and net proceeds, after deducting the initial purchaser’s discount but before deducting estimated fees and expenses, of approximately $446.6 million. The Company intends to use the net proceeds from the Greenshoe Exercise for general corporate purposes, including making investments in a manner consistent with the Company’s Investment Policy and potential acquisitions.
The conversion rate for the Additional Notes is the same as the conversion rate for the Notes: it will initially be 34.5872 shares of the Company’s Class A common stock, par value $.001 per share (the “Common Stock”) per $1,000 principal amount of Additional Notes, which is equivalent to an initial conversion price of approximately $28.91 per share of Common Stock. The initial conversion price of the Additional Notes represents a premium of approximately 32.5% over the U.S. composite volume weighted average price of the Common Stock from 1:00 p.m. through 4:00 p.m. Eastern Daylight Time on The New York Stock Exchange on June 12, 2025, the date of the Purchase Agreement (as defined below). The conversion rate is subject to adjustment under certain circumstances in accordance with the terms of the Indenture, dated June 17, 2025 (the “Indenture”) but will not be adjusted for any accrued and unpaid special interest. In addition, following certain corporate events that occur prior to the maturity date or if the Company delivers a notice of redemption, the Company will, in certain circumstances, increase the conversion rate for a holder who elects to convert its Notes in connection with such a corporate event or convert its Additional Notes called (or deemed called) for redemption during the related redemption period (as defined in the Indenture), as the case may be.
The Company offered and sold the Additional Notes to the initial purchaser in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”), and for resale by the initial purchaser to persons reasonably believed to be qualified institutional buyers pursuant to the exemption from registration provided by Rule 144A under the Securities Act. The Company relied on these exemptions from registration based in part on representations made by the initial purchaser in the purchase agreement, dated June 12, 2025, between the Company and the initial purchaser named therein (the “Purchase Agreement”). The Additional Notes and the shares of Common Stock issuable upon conversion of the Additional Notes, if any, have not been registered under the Securities Act and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.
To the extent that any shares of Common Stock are issued upon conversion of the Additional Notes, they will be issued in transactions anticipated to be exempt from registration under the Securities Act by virtue of Section 3(a)(9) thereof, because no commission or other remuneration is expected to be paid in connection with conversion of the Additional Notes, and any resulting issuance of shares of Common Stock. A maximum of 20,325,195 shares of Common Stock may be issued upon conversion of the Additional Notes based on the initial maximum conversion rate of 45.1671 shares of Common Stock per $1,000 principal amount of the Notes, which is subject to customary anti-dilution adjustment provisions.

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