GameStop is asking shareholders to approve a massive increase in authorized shares — 1.5 billion new ones — as it looks to build financial flexibility. The video game retailer also hasn't given up on buying eBay, despite an initial rejection.
The share increase plan
Authorized shares are the maximum number of shares a company can issue. GameStop currently has 300 million authorized. Adding 1.5 billion would bring that to 1.8 billion. The company says the move is about flexibility — giving it room to raise capital, make acquisitions, or reward employees. It's a big ask. The current share count is about 305 million outstanding. If all new shares were issued, existing shareholders would see significant dilution.
Still after eBay
GameStop's pursuit of eBay continues even after the online marketplace turned down an initial approach. The retailer sees eBay as a way to expand beyond physical game sales into a broader e-commerce platform. Details of the rejected bid haven't been made public. But GameStop's interest hasn't cooled. The company is likely weighing a higher offer or trying to win over eBay's board.
Why now?
The two moves — share increase and eBay chase — are linked. A bigger authorized share pool gives GameStop the currency to fund a large acquisition. eBay's market cap is around $30 billion. GameStop's is roughly $10 billion. So any deal would require stock, cash, or both. The share authorization vote would give GameStop the flexibility to issue shares as part of a purchase price. It's a strategy that's been tried before in retail: use a high-flying stock to buy a bigger fish.
Neither GameStop nor eBay has commented beyond the initial rejection. The shareholder meeting to vote on the share increase hasn't been scheduled yet. Investors are left waiting to see whether GameStop can pull off the share authorization and whether eBay will eventually come to the table.
