According to a press release on June 11th, GameStop plans to raise $1.75 billion through a private placement of convertible senior notes due in 2032, as the company explores digital asset investments in its updated investment strategy, including potential Bitcoin acquisitions.
These zero-coupon notes will be provided to qualified institutional investors in accordance with Section 144A of the Securities Act. The initial purchasers have the right to purchase an additional $250 million worth of notes within 13 days after the issuance. These unsecured notes do not pay interest or accumulate interest and will mature on June 15, 2032, unless they are converted, redeemed or repurchased in advance. Gamestop stated that the conversion might be settled in cash, stocks, or a combination of both. The conversion rate and other final terms will be determined at the time of pricing.
Although Gamestop did not disclose specific investment targets, it stated that the proceeds would be used for “general corporate purposes”, including acquisitions and investments consistent with its investment policy, which allows the company to allocate funds to Bitcoin and other blockchain-based assets. The company had previously raised $1.3 billion by issuing another convertible note and purchased 4,710 Bitcoins for its reserves last month.
In recent weeks, market speculation around Gamestop’s potential Bitcoin investment has been on the rise, especially following a management shake-up and the company’s broader engagement with the digital asset sector. Gamestop previously hinted that its ambition is not limited to retailing games, but it is also exploring digital wallets, non-fungible tokens (NFTS), and decentralized infrastructure. This latest round of financing may offer the company greater flexibility, enabling it to shift more actively towards blockchain-related assets or technologies.
However, after the announcement was made, Gamestop’s share price slightly declined in after-hours trading, indicating that investors still have doubts about its investment plans at present.
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