GameStop is asking shareholders to approve a major increase in its authorized Class A common stock as the video game retailer continues exploring strategic opportunities, including its pursuit of eBay.
According to regulatory filings tied to the company’s upcoming annual meeting, GameStop’s board wants to raise the number of authorized Class A shares to 2.5 billion. The company currently has roughly 449 million shares outstanding. The proposal is scheduled to be voted on during GameStop’s July 7 annual shareholder meeting.
The move would significantly expand GameStop’s ability to issue equity for acquisitions, partnerships, financing activities, or other corporate initiatives. In its proxy materials, the company said maintaining a reserve of authorized shares would allow it to act decisively when strategic opportunities emerge.
The proposal comes shortly after GameStop CEO Ryan Cohen pursued an unsolicited takeover bid for eBay valued at approximately $56 billion. eBay rejected the proposal, describing it as not credible or attractive, but GameStop has since increased its economic exposure to the company to more than 6%.
Analysts have speculated that expanding the authorized share count could provide GameStop with additional flexibility to support future dealmaking efforts or capital raises tied to its acquisition ambitions. Some investors, however, have raised concerns about the potential for shareholder dilution if a large number of new shares are eventually issued.
The proposed share authorization increase is also being paired with a new performance-based compensation package for Cohen. Under the proposal, the CEO would receive stock options tied to aggressive market capitalization and EBITDA performance targets. The structure is intended to align compensation with long-term shareholder value creation.
GameStop said its stronger balance sheet, operational improvements, and expanded capabilities position the company to pursue long-term growth opportunities as it continues shifting toward a more digitally focused business model.
