GameStop Corp., listed on the NYSE as GME, has just announced its plan to gather $1.3 billion by privately offering convertible senior notes. The company intends to channel the funds into general corporate objectives, notably acquiring Bitcoin. This announcement came shortly after GameStop updated its investment strategy, allowing Bitcoin to be maintained as a treasury reserve.
The offer entails $1.3 billion in principal for 0.00% Convertible Senior Notes, set to mature in 2030. Additionally, GameStop is proposing an option for initial buyers to purchase an extra $200 million in notes within 13 days post-issuance. These notes will act as general unsecured obligations without accruing regular interest or increasing in value, with a maturity set for April 1, 2030, unless decided otherwise through conversion, redemption, or repurchase.
When it comes to converting these notes, GameStop can choose between cash, shares of its Class A common stock, or a mix of both. The details, including the initial conversion rate, will be finalized at the time of pricing. The company has mentioned that they will use the U.S. composite volume-weighted average price of its stock, noted between 1:00 p.m. to 4:00 p.m. Eastern Daylight Time on the pricing day, to establish the initial conversion price.
It’s important to note that neither these notes nor any potential shares from conversion will be registered under the Securities Act of 1933 or any state securities laws. This means they can’t be offered or sold in the U.S. without proper registration or a suitable exemption. GameStop also clarified that there’s no guarantee this offering will proceed as planned, or even at all.
This move marks a pivotal financial decision for GameStop as it leans into Bitcoin integration within its corporate framework. The approach seems to take a page from Michael Saylor’s playbook at Strategy, who is believed to have influenced GameStop’s CEO Ryan Cohen in embracing Bitcoin as a reserve asset following their recent meeting.
