GameStop Corporation (GME), a video game retailer, has successfully completed a convertible debt offering that generated $1.5 billion, with some of the funds intended for purchasing Bitcoin.
The offering was originally planned to raise a minimum of $1.3 billion, but buyers opted to acquire an additional $200 million in aggregate principal amount of notes, GameStop disclosed in a filing to the Securities and Exchange Commission on April 1.
“The net proceeds from the offering are expected to be used for general corporate purposes, including investing in Bitcoin in alignment with the Company’s Investment Policy,” GameStop stated.
The convertible notes are a form of debt that can later convert into equity and are set to mature on April 1, 2030, unless they are converted, redeemed, or repurchased beforehand.
According to the filing, the initial conversion rate for the notes will be 33 shares of Common Stock per $1,000 principal amount of notes.
After the completion of the convertible debt offering, GameStop shares did not experience notable fluctuations. GME closed the trading day on April 1 up by 1.34% at $22.61 and only saw a slight increase of 0.5% after the market closed, according to Google Finance data.
Positive sentiment among shareholders led the stock to surge nearly 12% to $28.36 on March 26, following GameStop’s announcement regarding its Bitcoin
BTCUSD
, but the stock’s performance took a downward turn the next day, with GME shares falling nearly 24% to $21.68.
At that time, analysts suggested that the unfavorable response indicated shareholders’ concerns about GameStop’s underlying business model issues.
GameStop’s Growing Bitcoin Initiative
On March 25, GameStop revealed that it had secured board approval to invest in Bitcoin and US-dollar-pegged stablecoins using the notes and its existing cash reserves. As of February 1, those reserves totaled $4.77 billion, a significant increase from $921.7 million a year earlier, according to its fourth-quarter financial statements for 2024.
GameStop is late to the trend among public companies creating Bitcoin treasuries, as many others have already incorporated Bitcoin into their balance sheets following a playbook popularized by Michael Saylor’s strategy.
Previously, the video game retailer ventured into the crypto realm with a crypto wallet for its customers, which it eventually discontinued in November 2023 due to regulatory uncertainties.
GameStop is also recognized as the pioneering example of meme stock success, experiencing a short squeeze in 2021 that led to its stock skyrocketing over 1,000% in just one month as traders overturned hedge funds that had been profiting from shorting the company.
