GameStop Plans $1.75 Billion Note Offering for Bitcoin Purchases Amid Revenue Decline

GameStop, the video game retailer that gained significant attention as a meme stock, has announced plans to offer $1.75 billion worth of convertible senior notes to investors. This move is seen as a potential strategy to raise funds for additional Bitcoin purchases. The notes, which do not carry any interest, are set to mature in June 2032. The offering includes an option for initial purchasers to buy an additional $250 million in notes within two weeks of the initial issuance. Notably, these notes are only available to qualified institutional buyers.

The company did not explicitly state in its announcement that the proceeds from this offering would be used to fund additional Bitcoin purchases. However, it did mention that the funds would be used for investments consistent with GameStop’s investment policy, as well as potential acquisitions. In March, GameStop updated its investment policy to include Bitcoin as a Treasury Reserve Asset. This move reflects a growing trend among companies, both public and private, that are turning to Bitcoin to safeguard cash reserves or reposition themselves as Bitcoin acquisition vehicles.

GameStop recently completed its initial offering of convertible senior notes in early April, raising $1.5 billion with net proceeds of $1.48 billion. Part of these proceeds was used to purchase 4,710 Bitcoin, worth $513 million at the time. This acquisition positions GameStop as the 13th largest corporate Bitcoin holder. However, despite this significant investment in Bitcoin, GameStop’s shares have declined by over 9% since the company announced its plans to accumulate Bitcoin in March.

The latest offering comes on the heels of GameStop’s recent earnings report, which showed a lackluster performance. The company’s first-quarter revenue fell 17% to $732.4 million, compared to $881.8 million in the same period last year. Following the release of these earnings, GameStop’s stock dropped more than 5% during Wednesday’s trading session and an additional 10% in after-hours trading. The question remains whether GameStop’s Bitcoin-buying plan will ultimately serve as a catalyst to reverse the downward trend in its stock price.