GameStop’s Bitcoin Treasury

GameStop, the prominent video game retailer building a Bitcoin treasury, generated an additional $450 million in fundraising, enabling potential BTC acquisitions, as per an SEC filing.

The new raise enhances its previous convertible notes offering to $2.7 billion total, following an option exercised by the initial purchaser for additional 2030 notes. The offering was previously increased from $1.75 billion to $2.25 billion.

Although the net proceeds plans do not mention Bitcoin explicitly, it provides flexibility for GameStop to invest in the leading cryptocurrency.

> “The company intends to use the net proceeds from the greenshoe exercise for general corporate purposes, including investments consistent with the company’s investment policy and potential acquisitions,” the filing states.

This investment policy permits Bitcoin investment, as seen when the firm acquired 4,710 BTC valued at $512 million in May, approximately worth $506 million today.

Hints of GameStop’s intention to buy BTC arose in March, showcased by a picture of CEO Ryan Cohen with Bitcoin advocate and Strategy Chairman Michael Saylor. Strategy currently possesses nearly $64 billion in Bitcoin and developed the crypto treasury model that GameStop follows.

GameStop has leveraged convertible notes offerings to fund Bitcoin purchases, mirroring the strategy enacted by Saylor’s team. However, while Strategy frequently expands its Bitcoin holdings, GameStop’s future with the cryptocurrency is less certain. Cohen recently mentioned that the firm is “not going to call our shots in advance” regarding Bitcoin purchases, stating they are “not following anyone else’s strategy.”

Despite its fundraising and Bitcoin plans, GameStop’s stock has not benefited. Shares (GME) dropped over 10% to $30.73 following the initial Bitcoin purchase in May and again declined with the convertible notes announcement, now totaling nearly $2.7 billion.

While GME shares experienced a slight upturn, they remained down about 23% year-to-date at $23.55.

GameStop’s stock experienced a surge during the meme stock phenomenon, contrasting Wall Street with Redditors and retail traders in a tense short-squeeze battle.

The firm has also explored crypto beyond Bitcoin, initially planning an Ethereum NFT marketplace before abandoning it in early 2024, and scrapped its NFT wallet in 2023 due to regulatory uncertainties.

Edited by Andrew Hayward