- GameStop announced a $1.3 billion private offering of convertible senior notes due 2030.
- The company plans to use proceeds for corporate purposes and Bitcoin acquisitions.
- GME stock surged 11.8% but later fell 8% in after-hours trading after the announcement.
GameStop is making heads turn in the crypto sector. Right after announcing Bitcoin as a treasury reserve asset, the gaming retailer revealed a major plan of raising $1.3 billion through a private offering of convertible senior notes for buying Bitcoin and for other corporate purposes.
In an announcement, the company detailed its offering, stating that it will issue $1.3 billion in 0.00% interest convertible senior notes due in 2030. The notes will be offered privately to qualified institutional buyers under U.S. securities laws. Investors will have the option to convert the notes into cash, GameStop shares, or a combination of both. The final conversion terms will be determined during the pricing process.
GameStop also provided an offer to initial purchasers, wherein they can buy up to an additional $200 million in notes within 13 days. The company expects to set the reference price for conversion based on its stock’s volume-weighted average price. The notes will not be registered with the U.S. Securities and Exchange Commission, limiting their availability to specific investors.
Following the announcement, GameStop’s stock reacted sharply, with GME shares surging 11.8% on Wednesday, marking their best day since June 2024. However, the rally did not last long. In after-hours trading, shares dropped almost 8%. Despite the strong daily performance, GameStop’s stock remains down about 19% for the year.
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This fundraising move follows GameStop’s recent shift toward Bitcoin after announcing that the asset is part of its financial strategy, however, the firm did not reveal the quantity it would be acquiring. Analysts compare this move to Strategy, a firm known for accumulating large Bitcoin holdings. GameStop stated that it will use the funds from this offering for corporate expenses and strategic investments. Further, the company emphasized that its Bitcoin purchases will align with its investment policies.
The company’s decision to incorporate Bitcoin into its reserves signals a shift in financial management. The move also adds another layer of volatility to its already unpredictable stock performance. Investors continue monitoring GameStop’s actions as it navigates this new financial approach.
