GameStop Corp (NYSE:GME) stock gained almost 5% in Monday premarket trading as investors weighed weaker preliminary second-quarter sales, stronger profit expectations and changes to the company’s convertible-note exchange.
Q2 Sales Fall As Profit Climbs
GameStop expects second-quarter 2026 net sales of $780 million to $800 million (against an analyst consensus estimate of $756.85 million), down from $972.2 million a year earlier.
The company attributed the decline mainly to the prior-year Nintendo Switch 2 launch, planned store closures and the divestiture of its France operations.
Operating income is expected to rise to $150 million-$170 million from $66.4 million. Net income is projected at $290 million-$310 million, up from $168.6 million a year earlier.
GameStop said quarterly net income includes about $238 million in gains tied to its eBay Inc (NASDAQ:EBAY) derivative asset and equity investment, partially offset by roughly $75 million in losses on digital assets and related receivables.
eBay Investment Weighs On Cash Balance
GameStop expects cash, cash equivalents and marketable securities of $5.050 billion to $5.070 billion, down from $8.694 billion a year earlier.
The company converted its previously disclosed eBay derivative position into a direct equity investment during the quarter.
As of Aug. 1, GameStop held approximately 43.4 million eBay shares with a fair value of about $4.947 billion.
GameStop Shifts Part Of Debt Exchange To Cash
Separately, GameStop amended its previously announced exchange involving approximately $1.4 billion of convertible senior notes due in 2030 and 2032.
GameStop will now settle the exchange with approximately 55.5 million shares and $358.4 million in cash instead of using stock for the entire transaction. The amendment fixes the total number of shares issuable, with no additional shares due.
About $2.8 billion of the 2030 and 2032 notes will remain outstanding after the exchange closes.
GameStop expects the amended exchange to close around Sept. 3 and plans to report complete second-quarter results on Sept. 8.
GME Stock Price Activity: GameStop shares were up 4.76% at $18.72 during premarket trading on Monday, according to Benzinga Pro data.
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