GameStop Corp. shares rose 6.2% in pre-market trading on Monday, reversing recent declines that brought the stock to a 52-week low of $17.79.
The advance came as the broader U.S. market showed weakness, with the S&P 500 down 0.2%, the Dow Jones Industrial Average down 0.1%, and the Nasdaq Composite falling 0.2% in early trading.
The company’s preliminary unaudited results for the quarter ended August 1 indicated a significant improvement in operating income, projected between $150 million and $170 million. This compares with $66.4 million in the same period a year earlier. Net sales, however, declined to a range of $780 million to $800 million from $972.2 million in the prior-year quarter. The drop in revenue was attributed to factors including the launch of the Nintendo Switch 2 in the prior year, planned store closures, and the sale of operations in France.
Separately, GameStop announced changes to its $1.4 billion convertible notes exchange agreement. The original structure would have settled the notes entirely in Class A common stock over a 35-trading-day volume-weighted average price reference period starting August 3. Under the revised terms, the remaining period is terminated, replaced by a $358.4 million cash payment and the issuance of 55.5 million shares for the portion already elapsed. The adjustment fixes the total number of shares to be issued, eliminating open-ended dilution risk that had weighed on the stock in recent weeks.
During the second quarter, GameStop converted a derivative position related to eBay Inc. into a direct equity holding, contributing a substantial investment gain to net income.
