GameStop to Sell $1.3B of Convertible Notes to Fund Bitcoin Purchases
GameStop, the well-known video game retailer, has announced plans to issue $1.3 billion in convertible senior notes. The company will use the raised funds to purchase Bitcoin.
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GameStop intends to offer notes exclusively to qualified institutional investors, following the board's approval of an updated investment policy that now allows Bitcoin to be included in its reserves.
Related: GameStop to Add BTC to Its Strategic Reserves
Preliminary market response suggests growing interest in such financial instruments, as convertible notes have become a popular way to raise capital without the burden of interest payments.
In response to the news, Strategy Executive Chairman Michael Saylor, who previously met with GameStop CEO Ryan Cohen, posted a series of messages on X, praising the company’s new direction.
Investment Strategy and Note Terms
According to the press release, the convertible notes will not offer regular interest payments. The offering also includes an option to raise an additional $200 million within 13 days of the initial issuance.
Moreover, GameStop stated that it will use the proceeds for general corporate purposes, including Bitcoin purchases in line with its updated investment policy. Notably, this approach aligns with the strategy of other market players, such as Strategy, which previously rebranded to highlight its focus on crypto assets.
Related: Strategy’s Bitcoin Holdings Exceed 500,000 BTC
Market Reaction
As a result, GameStop stock climbed during the day trading session following the announcement, signaling investor interest in the company’s new financing instrument. However, after-hours trading showed some instability, with the stock price undergoing a noticeable correction.
Despite earlier efforts to integrate crypto into its business model (such as the launch of an NFT marketplace that shut down in February 2024 due to regulatory issues), GameStop now appears to be reevaluating its direction. The company is renewing its focus on leveraging modern financial instruments to strengthen its position in the crypto market.
Ultimately, the decision to raise capital through a private offering will help GameStop maintain liquidity while also positioning itself as one of the few traditional companies actively working to incorporate crypto assets into its portfolio.
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