GameStop stock climbs about 4% after $358.4 million dilution fix

GameStop stock climbed about 4% after the company paid $358.4 million in cash to stop a share count that could have continued to grow. The payment freezes the deal at roughly 55.5 million new shares. Those shares equal about 12% of GameStop's 448.7 million shares outstanding. On August 3, GameStop agreed to exchange $1.4 billion of zero-coupon convertible debt for stock. The share count depended on GameStop's average share price over 35 trading days. GameStop's stock fell 12.25% that day to $19.06 from $21.72 on July 31. Noteholders will receive 73% of the deal in shares and 27% in cash. No further shares can be issued under the deal. An amendment to the filing added a clause that participating noteholders may buy or sell common stock or enter into or unwind derivative transactions to adjust their positions. The clause includes purchases of common stock to close short positions. GameStop moved the closing date forward by 20 days to about September 3. The exchange retires only a third of the debt. Roughly $2.8 billion of the original $4.2 billion convertible stack remains outstanding. GameStop's holdings fell to about $5.06 billion from $8.694 billion. GameStop converted its proposed eBay takeover bid into 43.4 million eBay shares. Sales fell to between $780 million and $800 million from $972.2 million. Operating margin rose to roughly 20% from 6.8%. GameStop recorded a $75 million loss on its Bitcoin holdings and other digital assets. At $18.65, GME remained 14% below its July 31 close.