GameStop GME shares fell 10% on Monday after the video game retailer announced plans to exchange $1.4 billion worth of convertible debt for equity, a move that will substantially reduce its long-term debt but dilute existing shareholders.

The company said certain noteholders would swap about $400 million of notes due in 2030 and $1 billion of notes due in 2032 for newly issued shares.

GameStop said it would not receive any cash proceeds from the transaction, as the exchange is being carried out directly with existing noteholders.

While the deal strengthens the company’s balance sheet by eliminating a significant portion of its debt, investors appeared more concerned about the increase in the company’s outstanding share count.

The issuance of new shares reduces the ownership percentage of existing investors, a factor that has weighed on GameStop’s stock during previous capital structure transactions.

Debt reduction comes without cash outflow

Convertible note offerings allow companies to raise capital at relatively low borrowing costs while giving investors the option to convert their debt into shares if the stock performs well.

Senior noteholders also receive repayment priority in the event of bankruptcy, making the securities less risky than common equity.Under the latest transaction, GameStop will eliminate $1.4 billion of long-term debt without using its cash reserves.

Once the exchange closes, expected on or around September 23, approximately $1.1 billion of notes due in 2030 and $1.7 billion of notes due in 2032 will remain outstanding.

The company acknowledged that the transaction could affect the trading price of both its shares and outstanding exchange notes.

“GameStop expects that some or all of the Existing Noteholders that participate in the Exchange may purchase or sell shares of Common Stock in open market transactions or enter into or unwind various derivative transactions with respect to Common Stock to hedge or unwind their investments in the Exchange Notes.”

“These activities could increase or decrease the market price of the Common Stock or the Exchange Notes, the effect of which may be material,” it said in a statement.

Analysts unlikely to welcome the move

Despite the improvement in leverage, the broader analyst community is expected to remain cautious.

Market participants have generally maintained a bearish outlook on the stock, with at least one research firm assigning a price target well below current trading levels.

The latest transaction is also likely to reinforce concerns that existing shareholders are bearing the cost of strengthening the company’s balance sheet through additional equity issuance.

For investors, the immediate impact of dilution appeared to outweigh the long-term benefit of lower debt obligations.

eBay pursuit continues

The debt exchange comes as GameStop presses ahead with its ambitious attempt to acquire e-commerce marketplace operator eBay.

The takeover effort began in May when Chief Executive Ryan Cohen approached eBay’s board with an unsolicited acquisition proposal reportedly valued at about $56 billion.

eBay rejected the proposal, describing it as “neither credible nor attractive.”

Most recently, CNBC reported that Cohen agreed to forgo a compensation package worth up to $35 billion as he focused on advancing the proposed acquisition.

Last month, GameStop disclosed in a regulatory filing that it had increased its ownership in eBay to 43.4 million shares, representing approximately 9.8% of the company.

The expanded stake signaled that GameStop intends to continue pursuing the transaction despite eBay’s rejection of its initial offer.

Monday’s debt restructuring therefore represents another step in GameStop’s broader effort to reshape its balance sheet while pursuing one of the retail sector’s most closely watched takeover attempts.

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SpaceX stock (SPCX) edged higher on Monday, in line with a broader market rally as investors looked ahead to the company’s first quarterly earnings report as a publicly traded company.

The stock jumped about 1% in early trading.

The broader market advanced after President Donald Trump called off planned strikes against Iran, easing geopolitical tensions and sending oil prices lower on the first trading day of the month.

The Dow Jones Industrial Average rose 615 points, or 1.1%, while the S&P 500 gained 0.4% and the Nasdaq Composite advanced 0.2%.

Investors await first earnings report

SpaceX is scheduled to report second-quarter results after the market closes on Tuesday, marking its first earnings release since completing its June initial public offering.

Since its public debut on June 12, the stock has lost more than $500 billion in market value and has fallen more than 50% from its intraday high.

The shares are also coming off a fourth consecutive weekly decline.

The earnings release follows a closely watched reporting season for large technology companies, during which investors focused heavily on artificial intelligence spending plans and capital expenditure trends.

For SpaceX, investors are expected to focus less on quarterly results than on management’s long-term outlook for its AI, satellite, and launch businesses.

The stock’s valuation remains under scrutiny. With a market capitalization of about $1.4 trillion, SpaceX trades at a trailing price-to-sales ratio in the 70s while continuing to report significant losses and invest heavily in expansion.

Investor sentiment has also been weighed down by the prospect of additional share sales as rolling post-IPO lock-up restrictions begin expiring in the coming days.

AI investment remains in focus

Analysts expect SpaceX’s AI business to generate $2.33 billion in revenue during the April-June quarter, according to LSEG data, representing a sharp acceleration from the previous quarter.

Revenue from the company’s Starlink connectivity business is expected to reach $3.82 billion, while operating profit is forecast at $1.42 billion, up from $1.19 billion in the first quarter.

At the end of March, Starlink had 10.3 million subscribers, roughly double the level a year earlier, although average revenue per user declined nearly 25%.

SpaceX’s AI expansion remained its largest area of investment. The company spent $7.72 billion on AI initiatives during the first quarter, accounting for about three-quarters of total capital expenditure.

Total capital expenditure is expected to increase to about $14 billion in the second quarter, with AI-related spending projected to rise more than sixfold from a year earlier to approximately $10 billion.

The company has signed AI computing agreements with customers, including Anthropic, Google, and Reflection AI, though investors will be looking for evidence that those investments are translating into sustainable growth.

Bernstein highlights long-term execution

Ahead of the earnings report, Bernstein reiterated its Outperform rating and $239 price target on SpaceX.

The firm said management’s confidence in the company’s long-term growth trajectory will be more important than the quarterly financial results themselves.

Bernstein identified four factors that it believes will determine SpaceX’s long-term valuation: achieving rapid Starship reusability, securing sufficient semiconductor capacity, navigating regulatory approvals, and expanding AI computing capacity.

The firm’s analysts said Starship’s full reusability remains the cornerstone of the company’s long-term investment case.

Bernstein’s model assumes approximately 3,600 launches in 2031, a target it believes can only be achieved if both stages of the rocket become fully reusable.

The firm added that reaching its long-term launch assumptions would require at least daily launches, supported by a significant expansion in launch infrastructure.

SpaceX currently operates two launchpads and is adding two more, while also negotiating with state governments over the locations of an additional five or six facilities, according to Bernstein.

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Wix (NASDAQ: WIX) stock has come under intense pressure this year as investors grew concerned that the rise of AI-powered “vibe coding” could disrupt its website-building business. After peaking at $246 in January last year, the stock has tumbled 77% to around $55. Against this backdrop, the company will need to reassure investors that its growth prospects remain intact when it reports earnings on August 4.

Wix stock under pressure ahead of earnings

Many software companies have tumbled this year amid the ongoing SaaSPocalypse concerns. This includes top companies like Adobe, Workday, ServiceNow, and Figma. 

Wix and other website builders are some of the most exposed companies because of their business models. 

For starters, Wix offers a website builder that makes it possible for people to create quality websites without the need for code.

Today, vibe coding platforms are disrupting this industry by making it easy for people to build applications and websites easily. One just needs to describe the project and the AI tools will do the rest. 

Wix has taken note of this and has moved to the industry. Last year, it bought Base44 in a $80 million deal. It has also launched several AI tools, including Wix Harmony, which combines vibe coding and drag-and-drop features.

The most recent results showed that Wix’s revenue rose by 14% in the last quarter to $541 million. Its bookings jumped by 15% to $585 million, while its transaction revenue rose by 20% to $70 million. Some of this growth was driven by the performance of Base44, which has become a major player in the vibe coding industry.

Wix stock will be in focus this week as it releases its earnings on Tuesday. Analysts predict that its revenue rose by 12% to $552 million in the last quarter. The most optimistic analyst predicts that the revenue will jump to $559 million.

The ongoing AI investments are coming at a big cost for the company. As a result, investors anticipate the earnings-per-share (EPS) to come in at $1.21, much lower than last year’s $2.28. The management hinted of its slowing business in the last earnings report, saying.

“Our outlook accounts for the slower-than-expected start to the year in our Partners business as well as impact from productivity headwinds due to the war in the Middle East, which has pushed out certain important product rollouts for our professional audience.”

These challenges have made Wix to be relatively undervalued, with its forward price-to-earnings ratio falling to 10. This explains why the company debuted its share buyback plan in the last earnings.

However, while this is the case, the company will need to demonstrate strong growth for it to bounce back. I

Wix.com stock technical analysis

Wix stock chart | Source: TradingView

The weekly chart shows that the WIX stock has plunged in the past few months, moving from last year’s high of $246 to the current $55. It moved below $55 in June and reached a low of $40 in June. This price was an important support as it was its lowest level in June last year. 

A closer look shows that it has formed a break-and-retest pattern, a common bearish continuation sign in the market. It also remains below the 50-week and 100-week Exponential Moving Averages (EMA).

Therefore, the stock will likely resume the downtrend, potentially to the next key support level of $40 after earnings.

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