GameStop profits up 72% in Q2 on eBay direct equity conversion

GameStop (GME) stock rose 4% after paying $358.4M to halt potential share dilution. The company froze a deal at 55.5M new shares, 12% of outstanding shares. GameStop amended a $1.4B debt-to-stock swap, with noteholders receiving 73% in shares and 27% in cash. The move aims to prevent further share issuance and adjust hedging positions. However, $2.8B of debt remains, and cash reserves have decreased.

GameStop shareholders approved a share increase to facilitate its proposed $125 per share acquisition of eBay. The company reported strong fiscal 2025 results, with net income of $389.6 million and projected adjusted EBITDA for FY2026 to exceed $600 million. GameStop also renewed Bitcoin options with Coinbase, holding 4,710 Bitcoin with a receivable value of $369.6 million.

GameStop (GME) shares traded near $18.50 as investors awaited a $1.4B convertible-note exchange closing. The company expects Q2 sales of $780M-$800M, down from last year, but higher operating income. The exchange will issue 55.5M shares and $358.4M in cash. Short interest remains high at 13% of the float.

GameStop reported preliminary Q2 2026 results with net sales declining 18-20% YoY to $780-800M, but net income rising 72-84% to $290-310M, driven by $238M gains from its eBay investment. Operating income increased 126-156% to $150-170M. The company converted its eBay derivative position into 43.4M shares, reducing cash and equivalents to $5.05-5.07B from $8.694B YoY.

GameStop expects Q2 2026 revenue of $780m-$800m, down from $972.2m in Q2 2025, citing factors like Nintendo Switch 2 launch, store closures, and French operations sale. Despite lower revenue, operating income is projected at $150m-$170m, up from $66.4m, with net income of $290m-$310m, including gains from eBay investment. Cash reserves are expected to decrease to $5.05bn-$5.07bn. Full results will be published on 8 September 2026. The company previously considered a $55.5bn eBay takeover bid, wh

eBay's board will meet this week to review GameStop's non-binding proposal to acquire the company, according to a report. GameStop's offer, valued at $55.5 billion, includes a 20% premium over eBay's closing price. GameStop's CEO Ryan Cohen was unclear about financing details, causing market skepticism. eBay shares initially surged but returned to pre-announcement levels. Michael Burry sold his entire GameStop position, citing debt concerns.