GameStop’s Warrants Face October Deadline as eBay Bid Stalls

GameStop has until October 30 to receive any cash from warrants that could raise about $1.9 billion if fully exercised. The deadline arrives as the company’s proposed eBay takeover remains uncertain after eBay’s board rejected its offer.

The warrants let holders buy GameStop shares for $32 each. GameStop registered up to 59.15 million shares for issuance, which would generate about $1.89 billion before costs if every warrant were exercised.

That money is not committed acquisition financing. GameStop said warrant proceeds, if received, could go toward general corporate purposes, investments or potential acquisitions. Holders must pay cash to exercise, and the company receives no money from warrants that expire unused.

The $32 exercise price matters because a holder can buy GameStop shares in the market instead if they cost less. GameStop’s filing says warrants may still be exercised below that price, but doing so would mean paying more than the market price for the shares.

The proposed eBay deal is a separate hurdle. GameStop offered $125 per share in a mix of cash and stock, valuing eBay at about $55.5 billion. eBay’s board rejected the unsolicited, non-binding proposal on May 12, citing concerns that included financing uncertainty.

GameStop’s latest quarterly filing showed it held 43.4 million eBay shares, worth about $4.9 billion as of August 1. That stake gives GameStop exposure to eBay, but it does not by itself secure a takeover or resolve the board’s rejection.

Investors now face two questions: whether GameStop will pursue a new path toward eBay, and how many warrant holders will exercise before the deadline. The warrants could provide extra cash, but only if holders choose to pay the exercise price in time.