- GameStop issues $1.3B convertible notes to fund Bitcoin acquisition and corporate expenses.
- GME stock surges 11% as retail speculation rises amid Bitcoin treasury strategy.
GameStop is making a strategic shift into Bitcoin [BTC], announcing a $1.3 billion senior convertible note offering to partially fund its BTC acquisition.
Just a day after adopting Bitcoin as part of its financial strategy, the company also confirmed its intent to raise additional capital through convertible debt.
This includes a five-year maturity and a 0% coupon, potentially increasing to $1.5 billion if underwriters exercise their additional allocation.
For those unaware, the move, unanimously approved by its board, aligns with a growing trend of public companies integrating Bitcoin into their corporate treasuries, mirroring the approach pioneered by Strategy.
GameStop’s crypto strategy
The decision followed mounting pressure from investors, including Strive Asset Management CEO Matt Cole, urging GameStop’s leadership to leverage its excess cash reserves for Bitcoin investment.
The press release noted,
“GameStop expects to use the net proceeds from the offering for general corporate purposes, including the acquisition of bitcoin in a manner consistent with GameStop’s Investment Policy.”
This aggressive step signals GameStop’s deeper commitment to cryptocurrency as a hedge and value driver for shareholders.
GameStop’s newly announced convertible notes are set to mature on 1st April 2030, unless redeemed or converted earlier.
These notes will remain unsecured and will not accrue regular interest, maintaining their principal value throughout the holding period.
While GameStop has confirmed that the proceeds will be allocated toward general corporate purposes and Bitcoin acquisition, it has not disclosed the exact portion dedicated to BTC purchases.
Impact on crypto and memecoin market
Following the announcement, GME stock experienced an 11% surge, reflecting strong investor interest.
The ripple effect extended beyond equities, with meme coins like Dogecoin [DOGE], Shib Inu [SHIB], Pepe coin [PEPE], and Floki [FLOKI] recording consecutive days of gains.
At last check, GME traded at $28.36, marking an 11.65% increase in 24 hours, while Bitcoin saw a slight dip of 0.87%, trading at $87,478.60.
Critics still remain
However, despite such gains, this move was criticized by Wedbush analyst Michael Pachter, who in a conversation with Yahoo Finance said,
“The company’s strategy, which has changed about six times in three years, is they’re going to buy cryptocurrency and be just like MicroStrategy. If GameStop were to buy all Bitcoin with their $4.6 billion in cash and trade at two times their Bitcoin holdings, the stock would drop five bucks.”
Yet, not all execs were critical around this update as QCP analysts put it best when he said in a note to investors,
“While this is not a first in the corporate adoption story, the symbolic weight of GME’s meme status could rekindle speculative fervour among retail participants. As the 2021 playbook reminds us, retail flows, if coordinated, have the power to challenge institutional positioning.”
