GameStop Completes $1.5 Billion Debt Offering to Purchase Bitcoin

Video game retailer GameStop Corporation has successfully completed a convertible debt offering that raised $1.5 billion. The company plans to use some of the proceeds to buy Bitcoin as part of its investment strategy, according to an April 1 filing with the Securities and Exchange Commission.

The debt offering exceeded initial expectations, bringing in an additional $200 million beyond the original $1.3 billion target. Purchasers showed strong interest in the convertible notes, which can later be transformed into equity and will mature on April 1, 2030.

According to the SEC filing, the conversion rate will initially be 33 shares of Common Stock per $1,000 principal amount of notes. GameStop stated that the funds would be used for "general corporate purposes, including the acquisition of Bitcoin in a manner consistent with the Company's Investment Policy."

GameStop's stock performance showed minimal reaction to the completed offering. Shares closed up just 1.34% at $22.61 on April 1, with only an additional 0.5% increase after trading hours, based on Google Finance data.

In its SEC filing, GameStop acknowledged potential risks with its cryptocurrency strategy: "Bitcoin is a highly volatile asset and has experienced significant price fluctuations over time. Our Bitcoin strategy has not been tested and may prove unsuccessful."

The company had previously seen a brief 12% stock jump to $28.36 on March 25 after announcing its Bitcoin investment plans. However, the stock dropped nearly 24% to $21.68 the following day, with analysts suggesting investors were concerned about deeper issues with GameStop's business model.

The move follows GameStop's March 25 board approval to invest in:

• Bitcoin
• US dollar-pegged stablecoins

GameStop joins other public companies that have added Bitcoin to their balance sheets, though it's relatively late to this trend. The retailer's cash reserves stood at $4.77 billion as of February 1, a substantial increase from $921.7 million a year earlier, according to its 2024 fourth-quarter financial statements.

The company previously ventured into cryptocurrency with a wallet for users but shut it down in November 2023 citing regulatory uncertainty. GameStop gained fame as the first major meme stock success after a 2021 short squeeze sent its stock soaring over 1,000% in a month.