GameStop will use new share offering to wipe out long-term debt

GameStop raises $551 million from new offering that sold 3.5 million stock at market rates, will be used to transform company.

1 minute & 49 seconds read time

GameStop finished its recent share offering and generated a ton of revenue to spend on its new e-commerce transformation.

GameStop will use new share offering to wipe out long-term debt 233

GameStop's new at-the-market share offering was a big success. The company sold 3.5 million common stock and raised $551 million before fees, commissions, and expenses, which is almost twice as much as the long-term debt that GameStop owes.

The firm will use a portion of the funds to replenish its coffers after wiping out its long-term debt. GameStop announced the senior note redemption earlier this month, and secured a healthy influx of capital with the share offering. GameStop now has no long-term debts.

The gaming retailer will also use the funds to kickstart its ambitious new digital e-commerce empire with omni-channel distribution set forth by Chewy billionaire Ryan Cohen, who leads a strategic board committee. Under Cohen's plan, GameStop will "aggressively expand" its inventory and start making new kinds of gaming products available on its storefront.

GameStop will lose its CEO George Sherman in July as the executive plans to step down. A replacement has yet to be announced, and GameStop is also reducing its board of directors in effort to become more lean.

"GameStop disclosed on April 5, 2021 that it had filed a prospectus supplement with the U.S. Securities and Exchange Commission to offer and sell up to a maximum of 3,500,000 shares of its common stock from time to time through the ATM Offering. The Company ultimately sold 3,500,000 shares of common stock and generated aggregate gross proceeds before commissions and offering expenses of approximately $551,000,000. Net proceeds will be used to continue accelerating GameStop's transformation as well as for general corporate purposes and further strengthening the Company's balance sheet," reads a press release.

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Derek joined the TweakTown team in 2015 and has since reviewed and played 1000s of hours of new games. Derek is absorbed with the intersection of technology and gaming, and is always looking forward to new advancements. With over six years in games journalism under his belt, Derek aims to further engage the gaming sector while taking a peek under the tech that powers it. He hopes to one day explore the stars in No Man's Sky with the magic of VR.

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