GameStop (GME 0.21%) ended 2020 with $216 million in long-term debt. But under an early redemption notice announced yesterday, the video game retailer said it will be retiring the notes at the end of the month.

That will leave GameStop debt-free and able to focus its resources on transforming into a primarily e-commerce driven retailer.

Male smiling at a glowing smartphone

Image source: Getty Images.

GameStop said it was voluntarily issuing an irrevocable notice of redemption on April 30 for $216.4 million of its 10% senior notes that were due in 2023. It will use its cash on hand to pay off the debt.

While GameStop's fiscal 2020 year ended at the end of January with almost $509 million in cash and equivalents in the bank, earlier this month it increased the size of a share offering to 3.5 million shares at market prices. At its current stock price of $145 a share, the video game retailer would realize about $508 million.

The at-the-market (ATM) offering, though, is an expanded version of a $100 million ATM program it announced in December. At the time, GameStop stock was trading just under $17 a stub.

Of course, in January was the massive Reddit rally caused GameStop shares to surge, but the retailer failed to act on grabbing more cash from its elevated stock price. Considering shares remain inflated, the expanded offering gives it the chance to raise cash, pay off its debt, and still have plenty of money left over to finance its transformation.

Activist investor Ryan Cohen is firmly in charge of GameStop now. He was named chairman of the board, almost all serving directors will be stepping down, and the video game stock is looking for a new CEO. He'll now be able to effect the change he seeks unencumbered by debt.