GameStop has announced a $1.75 billion convertible notes offering, signaling a deepening commitment to its Bitcoin-centric treasury strategy.
GameStop Issues Convertible Notes Amid Strategic Shift
GameStop Corp. has unveiled plans to raise $1.75 billion through a private offering of convertible senior notes, reinforcing its ongoing strategic pivot toward cryptocurrency investments. The Texas-based video game retailer confirmed the move in a press release late Wednesday, with the offering targeting qualified institutional buyers.
The convertible senior notes will carry a 0.0% interest rate and are scheduled to mature on June 15, 2032. As unsecured general obligations of the company, the notes will not involve regular interest payments. Upon conversion, GameStop may settle the obligations through cash, its Class A common stock, or a combination of both.
Further Details To Be Announced
Initial purchasers have been granted a 13-day option to acquire an additional $250 million in notes following issuance. Final pricing details, including the conversion rate, will be determined based on the weighted average price of the company’s stock between 1:00 p.m. and 4:00 p.m. EDT on the pricing date.
However, the newly announced notes have not been registered under the U.S. Securities Act of 1933 and cannot be offered or sold domestically without registration or a qualifying exemption.
Proceeds Tied to Bitcoin-Focused Investment Policy
In March, the retailer revised its investment strategy to include Bitcoin as a treasury reserve asset, hinting at potential future cryptocurrency purchases. While GameStop has not explicitly stated that the raised funds will be used to acquire Bitcoin, the company clarified that the proceeds would be directed toward
“general corporate purposes, including making investments in a way that is in line with GameStop’s investment policy and possible acquisitions.”
The phrasing mirrors the company's April move when it issued $1.5 billion in convertible bonds and subsequently used the proceeds to purchase 4,710 Bitcoin tokens valued at approximately $513 million. That acquisition positioned GameStop as the 13th largest corporate Bitcoin holder globally, according to BitcoinTreasuries.NET.
Market Reaction and Financial Health
Following the announcement, GameStop’s shares tumbled 11.7% in after-hours trading on Wednesday. This followed a 5.34% drop during regular trading hours, closing at $28.55. The stock’s downturn comes on the heels of disappointing first-quarter earnings revealed earlier this week, where the company reported a 17% year-on-year revenue decline, falling to $732.4 million from $881.8 million.
Despite recent financial setbacks, GameStop maintains a strong liquidity position, underscored by a current ratio of 8.05. According to InvestingPro, the retailer's financial health remains rated as “GOOD.”
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
