GameStop Raises $1.5B in Convertible Debt Offering, Eyes Bitcoin Investment

GameStop Raises $1.5B in Convertible Debt Offering, Eyes Bitcoin Investment

GameStop Corporation (NYSE: GME) has successfully completed a convertible debt offering that raised $1.5 billion, surpassing its initial target of $1.3 billion. The company disclosed in an April 1 filing with the U.S. Securities and Exchange Commission that the proceeds will be used for general corporate purposes, including the purchase of Bitcoin.

Investors exercised their option to acquire an additional $200 million in aggregate principal amount of the notes, pushing the total offering above the original goal. The convertible notes, which allow bondholders to convert their holdings into equity, are set to mature on April 1, 2030, unless converted, redeemed, or repurchased earlier.

According to the SEC filing, the initial conversion rate is set at 33 shares of GameStop common stock per $1,000 principal amount of the notes.

Despite the financial milestone, GameStop’s stock showed little reaction. Shares closed 1.34% higher at $22.61 on April 1, with a modest 0.5% uptick in after-hours trading, based on data from Google Finance.

Investor enthusiasm surged on March 26, a day after GameStop revealed its Bitcoin investment plans, with the stock climbing nearly 12% to $28.36. However, the rally was short-lived; shares fell almost 24% the following day to $21.68. Analysts attributed the sharp reversal to concerns over the company’s underlying business model.

Late but Not Alone in Bitcoin Strategy

On March 25, GameStop announced that its board had approved the use of both the convertible notes and existing cash reserves to acquire Bitcoin and US dollar–pegged stablecoins. As of February 1, GameStop reported cash reserves of $4.77 billion—up significantly from $921.7 million a year earlier, according to its fiscal Q4 2024 earnings report.

Though a relative newcomer to Bitcoin treasury strategies, GameStop joins a growing list of public companies following a playbook championed by MicroStrategy’s Michael Saylor.

This isn’t GameStop’s first foray into the crypto world. The company previously launched a crypto wallet product but discontinued it in November 2023, citing regulatory uncertainties.

GameStop continues to be a standout name in retail investing circles, having become the poster child of the meme stock phenomenon following a dramatic short squeeze in 2021 that sent its stock soaring over 1,000% within a month.