According to The Block, video game retailer GameStop announced on Tuesday that it has raised $1.5 billion through a private offering of convertible notes, which is expected to be used for purchasing Bitcoin.
In documents filed with the U.S. Securities and Exchange Commission (SEC), GameStop stated that it has completed the previously announced private offering of zero-coupon convertible notes due in 2030, totaling $1.5 billion, which includes an option for initial purchasers to buy an additional $200 million in notes.
Although GameStop’s announcement regarding the convertible note issuance initially drove its stock price up last week, the stock, long considered a “meme stock,” has since continued to decline, indicating that investors may be skeptical about its plans to incorporate Bitcoin as part of its corporate assets.
GameStop’s move is similar to Strategy’s (formerly MicroStrategy) shift towards aggressively buying Bitcoin in August 2020. Nathan Cox, Chief Investment Officer at Two Prime Digital Assets, stated in an interview with The Block, “GameStop clearly sees the pattern and relative success of Strategy.” He added that with over $4 billion in cash and projected revenues of $3.8 billion in 2024, GameStop’s capacity to expand its Bitcoin holdings could be quite significant.
However, this strategy has also drawn criticism from many. Notable American angel investor Jason Calacanis recently mocked GameStop’s decision to invest in Bitcoin, calling it a “lifeline” for a publicly traded company lacking a business model.
