GameStop Corp. has asked its shareholders to approve a major expansion of the company’s authorized share capital, a step the video-game retailer says would preserve flexibility for strategic moves as it pursues an acquisition of eBay Inc.
According to a securities filing made public on Friday, GameStop is asking investors to authorize up to 2.5 billion shares of common stock and a total of 2.505 billion shares across all classes. The filing notes that as of May 20 the company had 448.7 million shares of common stock issued and outstanding and reported more than 269 million shares available for future issuance.
Under GameStop’s existing corporate charter, the firm is permitted to issue 1 billion shares of common stock and 5 million shares of preferred stock. The proposed change would therefore more than double the current cap on common shares and increase the overall ceiling for all share classes.
In a letter addressed to shareholders and included with the filing, the company emphasized cautious use of any newly authorized equity. "We view our equity as precious and do not intend to issue new shares lightly," the letter states. It adds that maintaining a reserve of authorized shares is intended to ensure GameStop can act decisively if the right opportunity presents itself.
The filing comes as GameStop’s chief executive, Ryan Cohen, has made an unsolicited offer valuing eBay at roughly $56 billion. Cohen has disclosed that any acquisition would be structured with approximately half cash and half stock. eBay has publicly rejected the proposal, characterizing it as "neither credible nor attractive."
Shareholders will have an opportunity to vote on the proposed increase at GameStop’s annual meeting, which is scheduled for July 7. The outcome of that vote will determine whether the company’s board gains the broader share-issuing authority the filing requests.
The request to expand authorized stock comes amid an active negotiation posture from GameStop’s leadership, with the company signaling a preference to retain optionality through its capital structure while moving forward with an aggressive takeover bid. The filing and shareholder letter make clear that any use of additional shares is not anticipated to be routine, but rather reserved for circumstances management deems strategically compelling.
Contextual note: The filing sets the framework for potential financing choices related to the proposed eBay transaction should it proceed, but it does not itself constitute an offer or a binding transaction.