GameStop Corp GME said Tuesday it is redeeming senior notes worth $216.4 million that were due in two years that would leave the company mostly debt-free.
What Happened: The video-game chain had long-term debt of $216.4 million as of end-January, according to the company’s regulatory filing. It had last month retired $73.2 million senior notes due 2021.
The company had in July 2020 raised about $216.4 million in senior notes due March 2023 in exchange for an equal amount of senior notes due March 2021.
The Dallas, Texas-headquartered company reported a narrower 2020 loss at $214.6 million on a revenue of $5.09 billion. Its sales have fallen in recent years as it has struggled to adapt to new-age digital downloads and free-to-play online games that have taken over the gaming world.
But the CEO, George Sherman, believes the company entered 2021 strong, citing a 23% rise in February same-store sales amid strong global demand for gaming hardware.
Why It Matters: The company is trying to transform from a brick-and-mortar retailer into an e-commerce marketplace competing with Amazon.com Inc AMZN. That’s the vision of investor Ryan Cohen.
Since Cohen joined GameStop’s board earlier this year, he has brought in new management, including people who worked for him at Chewy, the pet supply store he co-founded.
The unusual event of a brick-and-mortar retailer becoming debt-free amid the COVID-19 pandemic follows a rally in GME stock, driven primarily by users of Reddit's WallStreetBets community.
Other stocks that saw the short squeeze included AMC Entertainment Inc. AMC, Nokia Oyj NOK, BlackBerry Ltd. BB, and Rocket Companies Inc. RKT.
Price Action: Shares of GameStop closed 0.07% lower at $140.99 on Tuesday.
Read Next: Is GameStop Making A Crypto, NFT Foray?
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