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GameStop Shares Drop Over 7% After $1.4 Billion Debt-for-Equity Exchange Announced
['Mike Clair']
International Business Times Australia
GameStop Corp. shares fell more than 7% on Monday after the video game retailer and collectibles seller announced a private exchange of approximately $1.4 billion in convertible senior notes for Class A common stock.
GameStop said the exchange covers about $400 million of its 0.00% convertible senior notes due 2030 and $1.0 billion of notes due 2032.
The notes will be canceled upon closing, leaving roughly $1.1 billion of the 2030 notes and $1.7 billion of the 2032 notes outstanding.
In May the company made an unsolicited offer valued at about $56 billion, or $125 per share in cash and stock.
The notes exchange does not alter the company's core strategy of focusing on higher-margin categories and exploring larger platform opportunities.