GameStop Corp (GME): Retailer Completes Convertible Note Offering for Bitcoin Treasury

GameStop Corp (GME): Retailer Completes Convertible Note Offering for Bitcoin Treasury

TLDR

• GameStop has completed a $1.5 billion convertible note offering, including a fully exercised $200 million greenshoe option
• The company plans to use proceeds to purchase Bitcoin for its balance sheet following board approval
• GameStop had $4.77 billion in cash reserves as of February 1, 2024
• The notes will mature on April 1, 2030, with an initial conversion rate of 33 shares per $1,000 principal amount
• GME stock rose 1.35% during regular trading on April 1, with only modest movement after the announcement

GameStop Corp has officially closed a convertible note sale worth $1.5 billion, with plans to use the proceeds to add Bitcoin to its balance sheet. The video game retailer announced the completion of the offering on April 1, 2025, marking a significant step in its new investment strategy.

The sale included a fully exercised $200 million greenshoe option by the initial purchaser. After fees, the company will receive approximately $1.48 billion in net proceeds.

This move follows GameStop’s March 25 announcement alongside its fourth quarter earnings report. The company revealed that its board had approved an update to its investment policy to include Bitcoin.

Bitcoin Treasury Strategy

GameStop joins a growing trend of public companies creating Bitcoin treasuries. This strategy was popularized by Michael Saylor’s MicroStrategy, with many corporations now holding Bitcoin on their balance sheets.

The five-year convertible notes will mature on April 1, 2030. They can be converted to equity at a rate of 33 shares of common stock per $1,000 principal amount.

According to its 2024 fourth-quarter financial statements, GameStop had $4.77 billion in cash reserves as of February 1. This represents a substantial increase from $921.7 million a year earlier.

The company’s SEC filing states that it “expects to use the net proceeds from the offering for general corporate purposes, including the acquisition of Bitcoin in a manner consistent with the Company’s Investment Policy.”

Market Response

Market reaction to the convertible debt offering completion was relatively muted. GME shares closed up 1.34% at $22.61 on April 1, with only a modest 0.5% increase in after-hours trading.

This contrasts with the initial announcement of GameStop’s Bitcoin plans on March 25. The stock initially jumped nearly 12% to $28.36 on March 26, before dropping about 24% to $21.68 the following day.

Some analysts suggest the lukewarm reception may reflect shareholder concerns about GameStop’s underlying business model challenges.

The company’s Bitcoin investment comes as the cryptocurrency trades at approximately $84,900.

This isn’t GameStop’s first venture into cryptocurrency. The retailer previously launched a crypto wallet for its users, which it shut down in November 2023, citing regulatory uncertainty.

GameStop gained widespread attention in 2021 as the original “meme stock.” A short squeeze sent its shares surging over 1,000% in a month as retail traders targeted hedge funds that had shorted the company.

Ryan Cohen, GameStop’s CEO, has been leading the company’s strategic shifts. The board’s unanimous approval of the Bitcoin investment policy update signals the company’s commitment to this new direction.

The convertible notes are debt instruments that can later be converted into equity. They offer GameStop flexibility in managing its capital structure while pursuing its Bitcoin acquisition strategy.

With Bitcoin’s recent performance and growing institutional adoption, GameStop’s move aligns with a broader trend of companies diversifying their treasury assets beyond traditional financial instruments.

The company’s filing confirms that some proceeds will be used for Bitcoin purchases, though it doesn’t specify the exact amount or timing of these acquisitions.

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