GameStop Announces $1.3 Billion Fundraising Plan To Purchase Bitcoin
GameStop Corp. (NYSE: GME) has made a bold move by announcing a proposed private offering of $1.3 billion in convertible senior notes. The company plans to use the net proceeds from this offering for general corporate purposes, including the acquisition of Bitcoin. This decision comes shortly after GameStop updated its investment policy to allow Bitcoin to be used as a treasury reserve asset.
The offering consists of $1.3 billion aggregate principal amount of 0.00% Convertible Senior Notes due in 2030. GameStop also intends to grant initial purchasers an option to purchase up to an additional $200 million in notes within a 13-day period from the first issuance date. These notes will be general unsecured obligations and will not accrue regular interest. They are set to mature on April 1, 2030, unless converted, redeemed, or repurchased earlier.
Upon conversion, GameStop will have the flexibility to settle in cash, shares of its Class A common stock, or a combination of both. The specifics of the initial conversion rate and other terms will be determined at the time of pricing. The company has indicated that it will use the U.S. composite volume-weighted average price of its stock as the reference for the initial conversion price.
It is important to note that neither the notes nor any shares of common stock issuable upon conversion have been registered under the Securities Act of 1933 or any state securities laws. Therefore, they may not be offered or sold in the United States without proper registration or an applicable exemption. GameStop has also emphasized that there are no guarantees that the offering will be completed as described or at all.
This financial decision marks a significant shift for GameStop as it incorporates Bitcoin into its corporate strategy. The idea was influenced by Michael Saylor, a prominent figure in the cryptocurrency space, who met with GameStop’s CEO Ryan Cohen recently. This strategic move to embrace BTC as a reserve asset is a testament to GameStop’s commitment to evolving with the changing financial landscape.
