GameStop Announces $1.75 Billion Convertible Notes Offering Amid 17% Revenue Decline

GameStop Corp. has announced a $1.75 billion convertible notes offering, marking a significant move in its financial strategy. The offering, which consists of privately placed 0% convertible senior notes due 2032, targets qualified institutional buyers. This step is part of GameStop's trend towards diversifying its treasury, which may include potential purchases of Bitcoin.

The notes are unsecured and non-interest-bearing, with a maturity date of June 15, 2032. GameStop has the option to convert these notes into cash or Class A common stock, or a combination of both, based on the stock’s volume-weighted average price on the pricing date. Additionally, initial buyers have the opportunity to exercise an extra $250 million 13 days following the issue date.

GameStop plans to use the proceeds from this offering for general corporate purposes, including investments aligned with its revised investment policy and potential acquisitions. Earlier this year, GameStop used proceeds from a $1.5 billion convertible notes sale to purchase 4,710 Bitcoins, valued at $513 million as of May 28. This new offering has sparked speculation about further cryptocurrency investments, following the example set by companies like MicroStrategy.

GameStop's first-quarter financial report revealed a 17% decline in revenues to $732.4 million from $881.8 million a year ago. Despite this drop, the company reported a profit of $44.8 million, reversing a $32.3 million loss in Q1 2024. This financial move underscores GameStop's transition from a traditional video game retailer to a technology and investment company.

Following the announcement, GameStop's stock experienced significant volatility. Regular trading saw a 5.34 percent decline, or $28.55, on June 11, 2025. After-hours trading witnessed a further decline of 11.7 percent as investors expressed concerns over potential share dilution through the convertible notes. Since announcing its first Bitcoin purchase on May 28, GameStop's stock has fallen 18.5 percent.

The zero-interest notes provide GameStop with long-term financing flexibility, which is crucial given the challenges in the gaming retail business. The company's high liquidity, evidenced by a current ratio of 8.05, supports its ability to meet short-term liabilities. GameStop ranks thirteenth among corporations in terms of Bitcoin holdings, with 4,710 BTC as of the latest data.

This investment plan highlights GameStop's adaptability to an evolving economic environment. Through the convertible notes, the company can finance innovative projects without disrupting its operations. However, the company's press release notes that there is no assurance that the offering will be completed, contingent on market conditions.

GameStop's treasury move aligns with other companies using Bitcoin as an anti-inflation hedge. This strategy appeals to its retail investor base, a significant portion of whom are already involved in cryptocurrency markets. Nevertheless, the stock's short-term volatility may persist until investors can assess the long-term implications of this debt financing method.