Key Takeaways
- GameStop priced $1.3B in convertible notes at $29.85 per share.
- The notes carry a 35% premium over GameStop's latest closing price.
- Proceeds will fund Bitcoin purchases, making GameStop a top corporate holder.
GameStop has priced a $1.3 billion private offering of convertible senior notes, aiming to add Bitcoin to its balance sheet as part of a broader corporate strategy shift.
The zero-coupon notes, maturing in April 2030, will convert at a rate of 33.4970 shares per $1,000, equivalent to a conversion price of $29.85 per share.
Pricing details
This pricing represents a 35% premium over GameStop’s Thursday closing price of $22.09 and a 37.5% premium over the afternoon volume-weighted average on March 27.
The company also granted the initial purchaser an option to buy up to $200 million in additional notes within 13 days of issuance.
Investor reaction
Despite the high conversion price, investor skepticism caused GME shares to fall more than 22% on Thursday following the announcement of its Bitcoin investment plan.
CEO Ryan Cohen has positioned the move as a strategic use of the company’s cash reserves.
Potential impact
If fully executed, the offering could bring in up to $1.48 billion, with proceeds intended for general corporate purposes, including Bitcoin acquisitions in line with GameStop’s investment policy.
Corporate Bitcoin holdings
If the plan succeeds, GameStop would become the fourth-largest corporate holder of Bitcoin, trailing Riot Platforms and surpassing Tesla.
Conversion conditions
The notes are only convertible under specific conditions before January 1, 2030, and fully convertible thereafter.
GameStop may not redeem them before April 6, 2028.
