GameStop’s Bitcoin Acquisition Plan: GameStop Plans To Raise $1.3 Billion

GameStop, a popular American video game retailer, has announced its plans to offer investors $1.3 billion worth of convertible senior notes. They have employed this strategy straight from Strategy’s Bitcoin-buying playbook. The Strategy approach has been quite impressive, hence GameStop is currently planning to adopt it. During the press release, the Texas-based firm confirmed that the sale would be employed for general corporate purposes, including the acquisition of Bitcoin. GameStop has confirmed that it could purchase Bitcoin as a treasury reserve asset. The current announcement comes one day after the update on the investment policy of the company was released. 

GameStop’s $1.3B Fundraising & Bitcoin Plan

According to the press release, GameStop expects to offer the convertible notes to pay for a 0% dividend. GaemeStop’s class. It is possible to convert the debt into class A common stock of GameStop. This can undergo a conversion date and the pricing for the same will be released on a later date. Billions of dollars of convertible notes have been issued by Strategy. This has raised capital to purchase more Bitcoin. Strategy also unveiled the latest convertible debt in February. They will be raising $2 billion through the convertible notes that are expected to mature by March 2030. The maturation date of GameStop is also expected to be the same. By April 2030 the notes are expected to mature unless they have already been redeemed or converted by GameStop.

When the notes are converted, the retailers confirm that senior noteholders can receive a mix of shares and cash. During the regular trading hours, the shares of GameStop surged by 11% on wednesday. The prices slipped by $26.63 after hours of trading. Ryan Cohen, the CEO of GameStop has given a hint on the Bitcoin pivot of the firm. In a photo posted on his X account (previously known as Twitter) last month, Strategy co-founder can be seen posing with the Executive Chairman, Michael Saylor. GameStop will soon be buying Bitcoin using the debt. The Texas-based firm holds $4.7 billion in cash as well as cash equivalents. This indicates a significant surge from the reported $921 million the previous year. 

The Bitcoin acquisition seems to be the plan of GameStop to explore the crypto opportunities within the market. The anonymously approved plan for Bitcoin acquisition using corporate cash seems to echo the famous move of MicroStrategy. After the news, the meme stock has surged by 16%. The intention is the addition of Bitcoin and other cryptocurrencies to their balance sheet. GameStop has confirmed that a portion of its future debt, cash, and inquiry insurance might be directed for U.S. dollar-denominated stablecoins or bitcoin. The firm currently holds $4.8 billion in cash as of February 1. The firm clarified that they have not set a limit on the Bitcoin purchase.

Final Thoughts on GameStop’s Bitcoin Acquisition Plan

GameStop is currently under the leadership of CEO Ryan Cohen. Under his leadership, the firm is focusing on streamlining operations and reducing costs to confirm the profitability of the business. The company also clarifies that this move could expose it to the volatility of the crypto ecosystem. GameStop in the US Securities and Exchange Commission filing opinionated that their Bitcoin strategy has not been tested by them and might also be unsuccessful. The price fluctuations of Bitcoin can have a high impact on investors. Since Donald Trump won the election, Bitcoin has been experiencing a roller coaster ride. Bitcoin has declined by 18% after shooting up the price to the $100,000 milestone. GameStop has previously obtained gains from the meme coins. The updation is made after significant consideration and planning.