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GameStop Raising $1.3B Via Convertible Debt to Buy Bitcoin
The offering comes 24 hours after the company announced its intention to begin adding bitcoin to its balance sheet.
What to know:
- GameStop is offering $1.3 billion in convertible notes with a 0% coupon, with net proceeds expected to be used for acquiring bitcoin.
- Led by Ryan Cohen, GameStop is taking a page from Michael Saylor's Strategy, which has raised many billions via convertible debt for the purposes of building its bitcoin stack.
- GameStop one day ago made public its intention to begin buying bitcoin for its balance sheet.
Just 24 hours after adding its name to the roster of companies pursuing a bitcoin (BTC) treasury strategy, GameStop (GME) — led by its CEO Ryan Cohen — is also adding its name to those firms issuing convertible debt to raise funds for BTC acquisition.
The $1.3 billion of convertible senior notes will have a five-year maturity, according to a press release, and the underwriter greenshoe is for up to an additional $200 million. The paper will come with a 0% coupon.
STORY CONTINUES BELOW
"GameStop expects to use the net proceeds from the offering for general corporate purposes, including the acquisition of bitcoin in a manner consistent with GameStop’s Investment Policy," the press release continued.
In making this move, GameStop is joining the likes of Michael Saylor-led Strategy (MSTR), Semler Scientific (SMLR), MARA Holdings (MARA) and Riot Platforms (RIOT) as those firms issuing convertible debt for bitcoin purchases.
GME shares are down 7% in after-hours trading following an 11.7% advance in the regular session on Wednesday. Bitcoin appears to be bouncing off of its worst levels of the day on the news, retaking $87,000 after falling as low as $86,000 minutes ago.
Stephen Alpher
Stephen is CoinDesk's managing editor for Markets. He previously served as managing editor at Seeking Alpha. A native of suburban Washington, D.C., Stephen went to the University of Pennsylvania's Wharton School, majoring in finance. He holds BTC above CoinDesk’s disclosure threshold of $1,000.
