Hedge funds seeking to install two directors on the GameStop (NYSE: GME) board of directors allege that current members destroyed $2.5 billion in shareholder value over the past five years while causing the company to become larded with debt. Hestia Capital Partners and Permit Capital Enterprise Fund own 7.2% of the video game retailer's stock and they allege seven board members are responsible for GameStop taking on $825 million in debt to finance stock buybacks at around $30 a share, all the while selling their own stock for about $48 a share. Now GameStop is scrambling to refinance some $420 million worth of that debt ahead of its March 2021 maturity date. Image source: Getty Images. No skin in the game While GameStop has been a surprise beneficiary of the COVID-19 stay-at-home orders, the hedge funds allege the video game retailer is in worse financial straits than it otherwise would be. In a letter to shareholders, they say the current board initiated $1.3 billion in buybacks at $29.86 a share between 2012 and 2016, a time when one director sold $630,000 worth of stock and another sold a quarter of her holdings at $41.96 -- that's stock that was given to her, not bought. In all, directors sold over $64 million worth of stock during that time. They also say the board is trying to take credit for selling Spring Mobile, when it was actually other investors that urged the company to do so, and it occurred only after pursuing a misguided acquisition of Telecom and Simply Mac. The hedge funds say the seven directors have hand-picked their successors who don't have the experience needed to turn the company around. 10 stocks we like better than GameStopWhen investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.* David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and GameStop wasn't one of them! That's right -- they think these 10 stocks are even better buys. See the 10 stocks *Stock Advisor returns as of April 16, 2020 Rich Duprey has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.Source