GameStop Completes $1.5 Billion Convertible Senior Notes Offering
GameStop, the renowned video game retailer, announced the completion of a robust $1.5 billion convertible senior notes offering. The main objective of this move is to acquire Bitcoin to integrate into the company’s corporate treasury.
Last week, GameStop revealed its strategy to increase its cryptocurrency reserves, initially listing Bitcoin among acceptable treasury assets. The company later announced its intention to raise $1.3 billion through this offering of notes, which was eventually expanded with the sale of an additional $200 million, according to the most recent filings with the SEC.
The notes, which mature on April 1, 2030, netted GameStop approximately $1.48 billion in net proceeds, after deducting pre-purchase discounts and other related expenses. The company confirmed that it “expects to use the net proceeds from the offering for general corporate purposes, including the purchase of Bitcoin.”
This strategy puts GameStop on a similar trajectory to Strategy, which is known for holding the largest amount of Bitcoin in treasury among public companies. To date, Strategy has accumulated a total of 528.185 BTC, equivalent to more than $45 billion, since it began its purchases of the cryptocurrency in 2020.
In a show of support for his new treasury policy, GameStop CEO Ryan Cohen in February posted a photo with Michael Saylor, the co-founder and executive chairman of MicroStrategy and a well-known advocate for corporate Bitcoin reserves.
Despite the initial enthusiasm that drove GameStop shares higher following the announcement, the market’s reception to the idea of accumulating more debt to shore up its crypto reserves has not been entirely positive. GME shares have seen a significant drop, dropping nearly 22% over the past week. However, they did see a bounce back on Tuesday, when the stock rose 1.3% to close at $22.61, with an additional 1.4% increase after the close.