GameStop Raises $1.5B, Eyes Bitcoin Investment

Iconic video game retailer GameStop has raised $1.5 billion through a convertible notes offering. According to the company’s plans, a portion of the funds will support the purchase of Bitcoin for its corporate treasury.

GameStop submitted the necessary documents to the SEC, indicating that the initial offering raised $1.3 billion, with an additional $200 million secured through the initial purchaser option. The financial instrument, which allows debt to be converted into equity, could influence GameStop’s future capital structure.

Details of the Convertible Notes Offering

The notes carry a 0.00% interest rate and mature in 2030. According to the conversion terms, each $1,000 principal amount of notes is convertible into 33 shares of common stock. The company plans to use the proceeds for general corporate purposes, including the acquisition of Bitcoin in line with the company’s updated investment policy.

GameStop had previously announced plans to add crypto assets to the list of eligible treasury reserves, a decision that was approved by the board of directors. By the end of the reporting period, the company held $4.77 billion in cash, indicating its ability to make significant investments in cryptocurrency. 

This move reflects GameStop’s focus on established market strategies, taking cues from companies like Strategy, which has been actively investing in Bitcoin.

Related: Michael Saylor’s Strategy Acquires $1.92 Billion Worth of Bitcoin

Market Reaction and Expert Opinions

After GameStop announced its updated investment policy, the company’s stock climbed to $28.36. However, the momentum didn’t last, and the share price later dropped below $22, causing concern among investors. Once the market began to stabilize, GME shares closed at $22.61 (according to the data at the time of writing).

Related: GameStop Stock Tanks 22% After $1.3B Bond Plan for Bitcoin Buys

Still, using borrowed funds to build a cryptocurrency reserve raises concerns, especially in uncertain market conditions. GameStop previously explored crypto products. For instance, the company launched a crypto wallet, but shut it down in November 2023 due to regulatory uncertainty.

Today, the company shows a clear intention to adjust its financial strategy, using Strategy’s experience as a reference point. Nevertheless, its success remains uncertain, since the outcome is still unfolding.

In this way, GameStop signals a clear intent to update its corporate asset management model by integrating crypto investments. However, the next steps will depend on investor response, market dynamics, and how changes in the capital structure affect the company’s financial stability.

Related: Elliot Chun: 25% of S&P 500 Companies Will Hold Bitcoin by 2030