GameStop ends $250 million credit line. Shares head for biggest gain since June.

By James Rogers

Shares of the video game retailer and original meme stock surged Thursday

GameStop Corp. shares rose 11.7% on Thursday, putting the video game retailer’s stock on track for its biggest gain since June 13, when it rose 14.4%, according to Dow Jones Market Data.

The stock was also set to snap a three-day losing streak. In an SEC filing on Wednesday, GameStop (GME) said it has voluntarily terminated a $250 million credit agreement the company entered into in November 2021. Wells Fargo (WFC) is serving as administrative agent and collateral agent on the agreement, which matures in November 2026.

“The termination of the agreement is effective August 27, 2024,” GameStop said in the letter. “Following the implementation of the termination, the company’s primary sources of liquidity will be cash from operations and cash on hand.”

In June, GameStop said it had raised $2.14 billion in stock sales, noting it may use the funds for mergers and acquisitions.

Related: GameStop says it raised $2.14 billion in stock sale. Roaring Kitty memes continue.

According to the latest stock market data, the short interest in publicly traded GameStop shares is 9.3%.

Earlier this year, the return of influential trader Keith Gill, aka “Roaring Kitty,” sent shares of GameStop and AMC Entertainment Holdings Inc. (AMC) soaring. Both stocks were prominent in 2021’s meme stock frenzy, in which Gill was an influential figure.

In June, a Reddit post from an account associated with Gill showed that he had a large stake in GameStop. On June 7, Gill held his first YouTube livestream in three years, an event that drew widespread attention. Gill used the livestream to discuss what he described as the “over-focus” on GameStop’s business.

“They’re in a transformational stage,” he said, before saying of GameStop CEO Ryan Cohen: “I believe this guy — he might be able to do it.”

Related: Why Roaring Kitty Is a “Loyal Believer” in GameStop

GameStop shares are up 25.9% in 2024, outpacing the S&P 500 (SPX)’s 18.2% gain.

GameStop on Tuesday announced that the company’s second-quarter results will be released after the market close on September 10.

Last week, Cohen posted on X that GameStop was looking for American product and graphic designers. The GameStop CEO’s posts are closely watched for clues about his plans for the company.

Related: Riding the Roaring Kitty Rollercoaster: Why the GameStop and AMC Meme Craze Is an ‘Exceptional Event’

GameStop announced layoffs earlier this year as it seeks to increase profitability.

In June, Cohen told the video game retailer’s investors that he was focused on creating a “smaller network of stores.”

Cohen, co-founder and former CEO of Chewy Inc. (CHWY), has been named CEO of GameStop in September 2023, marking another chapter in his attempts to breathe life into the video game retailer that has arguably become the prototype of meme stocks.

In December, GameStop’s board of directors approved a new investment policy that allows the company to invest in securities, among other investments. The board gave Cohen the authority to manage the investment portfolio.

-James Rogers

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08-29-24 1349ET