Key Takeaways
- Video game retailer GameStop has announced that it has completed a $1.5 billion offering.
- As per reports, the firm announced earlier that it would start buying Bitcoin for its treasury once the sale of its convertible notes is completed.
- With Tuesday’s recent announcement, GameStop plans to proceed with the Bitcoin purchase.
- The recent updates note that the purchase will be completed in parts.
GameStop, a popular video game retailer, has recently announced that the firm has completed a $1.5 billion offering of convertible senior notes to investors. According to an announcement from GameStop released last week, the company was planning to fund a Bitcoin reserve once it completes the convertible notes sales. Now that the firm confirms that the sales have been completed, GameStop moves forward with its plans to purchase Bitcoin to hold in its corporate treasury. However, as per the current information, this Bitcoin purchase will be divided into different parts.
As mentioned, the plans to initiate a Bitcoin reserve were announced last week by GameStop. However, even before the announcement, the firm had added the asset to its list of acceptable treasury assets. It was only after this move that GameStop’s Bitcoin plans were released. Moreover, as per GameStop’s filings with the SEC, apart from the $1.3 billion raised through the offering, the company also sold notes worth $200 million.
According to the recent information, GameStop acquired about $1.48 billion in net proceeds with the sale of the convertible senior notes that will mature on April 1, 2030. Moreover, the filings to the SEC note that these net proceeds from the offering will be used by the firm for general corporate purposes, such as the acquisition of Bitcoin.
Will GameStop be the successor of Strategy?
Experts note that with the recent announcements, GameStop is following the same path as that of Strategy, one of the public companies with the largest amount of Bitcoin reserves. According to current information, Strategy holds 528,185 BTC, which equals around $45 billion worth. Following the same path, GameStop is also moving towards such a huge Bitcoin reserve, according to reports.
Analyzing the past events, GameStop has given hints of the bitcoin reserved and its latest moves earlier itself. In February, GameStop CEO Ryan Cohen shared an image of himself with Michael Saylor, the co-founder and Executive Chairman of MicroStrategy. According to expert opinion, Michael is a vocal advocate of corporate Bitcoin treasury reserves and hence has influenced Cohen to an extent.
Also Read: GameStop’s Bitcoin Acquisition Plan: GameStop Plans To Raise $1.3 Billion
Investors’ reaction to GameStop’s Bitcoin reserve
The investors’ reaction to the latest announcement of GameStop does not seem attractive. Although investors were excited about GameStop’s Bitcoin move, they later showed a negative reaction. While at first the stock price of the firm surged last week, soon after the initial announcement of the Bitcoin move was released, now, investors do ot seem thrilled. Most investors think that GameStop’s move to raise more debt to launch its crypto reserve might not be beneficial. Although the price surged, it fell sharply and remains nearly 22% dip over the last week. So, the investors are not happy with GameStop getting involved in more debt, according to reports.