GameStop Corp. (NYSE: GME) declared today its plan to secure $1.3 billion through a private placement of convertible senior notes, intending to use the net earnings from this offering for general organizational needs, which includes acquiring Bitcoin. This action follows a day after the firm disclosed amendments to its investment strategy, permitting Bitcoin to function as a treasury reserve asset.
The offering comprises an aggregate principal amount of $1.3 billion in 0.00% Convertible Senior Notes maturing in 2030. Furthermore, the company intends to provide initial purchasers with the opportunity to acquire up to an additional $200 million in notes within a 13-day timeframe from the initial issuance date. The notes will represent general unsecured liabilities and will not accrue typical interest or increase in value. They are set to mature on April 1, 2030, unless they are converted, redeemed, or repurchased prior to that date.
Upon conversion, GameStop will have the choice to settle in cash, shares of its Class A common stock, or a combination of both. The initial conversion ratio and other conditions will be established at the time of pricing. The organization expressed its expectation to reference the U.S. composite volume-weighted average price of its stock from 1:00 p.m. to 4:00 p.m. Eastern Daylight Time on the pricing date as the basis for the initial conversion price.
GameStop stressed that neither the notes nor any shares of common stock that can be issued upon conversion have been or will be registered under the Securities Act of 1933 or any state securities regulations. Consequently, they may not be offered or sold in the United States without proper registration or an applicable exemption. The company added that there are no guarantees that the offering will proceed as outlined or at all.
This represents a substantial financial choice for GameStop as it shifts towards incorporating Bitcoin into its corporate plan. A strategy initiated by Strategy’s Michael Saylor, who personally met with GameStop’s CEO Ryan Cohen last month, and has evidently had an impact on GameStop’s decision to adopt BTC as a reserve asset.
