GameStop Announces Plans to Raise $1.3 Billion in Convertible Debt

GameStop has announced plans to raise up to $1.3 billion through convertible debt to further increase its Bitcoin holdings. Led by CEO Ryan Cohen, GameStop is raising funds to boost its BTC holdings, following the company’s recent unveiling of its Bitcoin treasury strategy.

Details of the Offering

The company plans to issue $1.3 billion in convertible senior notes, with a five-year maturity and a potential additional raise of $200 million. The notes will carry a 0% coupon and are set to mature on April 1, 2030, unless converted, redeemed, or repurchased earlier. GameStop intends to use the funds for general corporate purposes, including purchasing Bitcoin according to its Investment Policy.

Industry Context

With this move, GameStop joins other companies like MicroStrategy (MSTR), Semler Scientific (SMLR), Marathon Digital (MARA), and Riot Platforms (RIOT), which have issued convertible debt to fund Bitcoin acquisitions. Michael Saylor initiated a poll on X asking for opinions on how much Bitcoin GameStop should buy to gain respect from the Bitcoin community, with responses suggesting at least 1 billion.

However, GameStop’s stock has seen a decline over 6% following the announcement of the convertible notes offering. Despite an initial 30% surge in stock price, concerns regarding potential share dilution have contributed to this drop. Nonetheless, analysts suggest that just like MicroStrategy’s Bitcoin strategy helped boost MSTR, GameStop’s approach could facilitate long-term stock growth.

In related news, Bitcoin prices have rebounded, rising to $87,000 after a brief dip to $86,000.