GameStop announced a significant increase in its planned convertible note offering to $2.25 billion, signaling a deeper move into Bitcoin investment.
The announcement follows the company’s recent purchase of 4,710 Bitcoins, valued at approximately $513 million, as part of its broader plan to establish a corporate Bitcoin treasury.
New Financing to Support Crypto-Backed Strategy
The video game and electronics retailer confirmed that the note sale is expected to close on June 17. If initial purchasers exercise their full option, GameStop could raise up to $2.68 billion. The notes will mature on June 15, 2032. This increase from the previously announced $1.75 billion offering shows the company’s growing commitment to Bitcoin and possibly other crypto-related investments.
Where the Funds Will Go
According to the official statement, the proceeds will be used for “general corporate purposes, including making investments consistent with GameStop’s Investment Policy.” This suggests further Bitcoin purchases may be part of the plan. GameStop is already the 11th largest public company holding Bitcoin, behind firms like Galaxy Digital, according to Bitbo data.
Despite the ambition behind the strategy, investors responded negatively. GameStop shares dropped over 22% on June 12 following the initial announcement. Analysts point to weak Q1 financial results as a factor in investor hesitation. GameStop reported $732.4 million in revenue, short of the $754.2 million estimated by analysts and down 17% from the same period last year. The decline was largely attributed to slowing physical game sales.
GameStop’s approach mirrors that of other firms like Strategy, the largest corporate holder of Bitcoin, which also recently boosted a stock offering to fund further crypto acquisitions. These companies are betting on digital assets as long-term stores of value, but the sharp drop in GameStop’s stock suggests that not all shareholders are confident in this shift.