Video game retailer GameStop said Tuesday that it has completed a $1.5 billion offering of convertible senior notes to investors, with plans to use the proceeds in part to purchase Bitcoin to hold in its corporate treasury.
GameStop announced its Bitcoin plans last week, first adding the asset to its list of acceptable treasury assets before announcing that it planned to raise $1.3 billion via the offering. A further $200 million worth of notes were also sold, according to the firm's Tuesday filing with the SEC, as was originally listed as an option for the initial purchaser.
The sale of the convertible senior notes—which will mature on April 1, 2030—left GameStop with about $1.48 billion in net proceeds, less discounts for the initial purchaser and company expenses. As previously stated, the filing notes that the firm "expects to use the net proceeds from the offering for general corporate purposes, including the acquisition of Bitcoin."
GameStop Borrows Strategy Playbook, Plans to Raise $1.3 Billion to Buy Bitcoin
Video game retailer GameStop said on Wednesday that it plans to offer up to $1.3 billion worth of convertible senior notes to investors, taking a page straight out of Strategy's Bitcoin-buying playbook. The Texas-based firm said in a press release that proceeds from the sale will be used for "general corporate purposes, including the acquisition of Bitcoin." The announcement comes one day after GameStop said it could purchase Bitcoin as a treasury reserve asset following an update to the company...
By selling convertible senior notes to fuel Bitcoin purchases, GameStop is taking a page out of the playbook of Strategy, the public company with the largest amount of BTC in its treasury. As of this writing, Strategy holds 528,185 BTC, or just over $45 billion worth, since it began buying the leading cryptocurrency in 2020.
In February, GameStop CEO Ryan Cohen shared a photo of himself with MicroStrategy co-founder and Executive Chairman Michael Saylor, a vocal advocate for corporate Bitcoin treasury reserves.
Why GameStop Sold Crypto Before Its Latest Bitcoin Bet
GameStop’s announcement on Wednesday that it would sell convertible debt to buy Bitcoin and bolster its balance sheet seems contrary to its past approach to digital assets. In recent years, the video game retailer debuted an ill-fated NFT platform and sold large quantities of IMX, the native token of Ethereum layer-2 network Immutable X. GameStop now appears to be following the path of Bitcoin hodler Strategy, saying it will offer $1.3 billion worth of convertible senior notes and potentially u...
While initial excitement over GameStop's Bitcoin move fueled a rise in the firm's stock price early last week, investors did not appear thrilled with the idea of GameStop raising more debt to launch its crypto reserve. GME fell sharply late last week following that announcement, and remains down nearly 22% over the last week.
But GME did tick up on Tuesday, including after hours following the SEC filing. GME finished Tuesday up 1.3% at a price of $22.61, and has climbed another 1.4% or so since the close of trading.
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