GameStop said it would swap $1.4 billion worth of debt for stock on Monday, sending the video-game retailer's shares tumbling ahead of the opening bell.

The one-time meme stock slumped 8.4% to $19.90 ahead of the opening bell. Futures tracking the S&P 500 were 0.7% higher after President Donald Trump said the U.S. would restart talks with Iran.

GameStop said in a press release on Monday that it had agreed to exchange about $1.4 billion of outstanding convertible senior notes due in 2030 and 2032 for shares of its Class A common stock.

Retiring debt by issuing stock dilutes existing shareholders and tends to trigger hedging and short-selling by institutional investors, which explains why GameStop was tumbling on Monday.

Shares were up 8.2% for the year through the end of last week, powered higher by record-breaking profits and a $2 billion stock buyback plan.

Online marketplace platform eBay rejected a $56 billion takeover bid from GameStop in May, describing the much smaller company's proposal as "neither credible nor attractive."