GameStop upsizes private offering to $2.25 billion despite stock slump amid bitcoin treasury plans

GameStop announced the pricing of its private offering of zero-coupon convertible senior notes late Thursday, upsizing the deal from $1.75 billion to $2.25 billion.

The notes are unsecured, pay no interest, and don't accrue value, but can convert into GameStop stock at a premium closer to maturity, the firm said. They mature on June 15, 2032, unless converted, redeemed, or repurchased earlier. Investors may be drawn to the opportunity to convert at a favorable price if the stock rises, along with downside protections such as a buyback option in 2028 or during major corporate events.

The company also granted initial purchasers a 13-day option, commencing on the issue date, to purchase up to an additional $450 million in notes. The sale is expected to close on June 17, 2025, subject to customary closing conditions.

GameStop expects to raise around $2.23 billion in net proceeds from the offering — or $2.68 billion if the full overallotment option is exercised — after deducting fees, commissions, and expenses.

The struggling video game retailer and popular meme stock intends to use proceeds from the offering for general corporate purposes, including potential acquisitions aligned with its investment policy. In March, GameStop updated that policy to include bitcoin as a treasury reserve asset , then raised $1.5 billion through convertible notes in April. On May 28, GameStop disclosed it held 4,710 BTC (currently worth around $495 million) following its first set of bitcoin purchases.

The move follows a steep 17% decline in Q1 revenue, which fell to $732.4 million from $881.8 million in the same period a year earlier. The initial $1.75 billion offering, announced late Wednesday, seemingly did not go down well with its common stock investors, with GME plunging 25% at one point on Thursday, according to TradingView. GameStop's stock ultimately closed down 22.5% on the day, ahead of the firm's announcement of an upsized offering. GME is currently down 0.3% in pre-market trading on Friday and has lost more than 30% year-to-date

Keith "Roaring Kitty" Gill and the WallStreetBets subreddit famously helped ignite the meme stock frenzy that sent GameStop's trading volume soaring during its 2021 height.