On March 26, shares of a prominent video game retailer surged by nearly 12% following the announcement that the company intends to buy Bitcoin (BTC).
The acquisition will be financed through debt. After the markets closed on March 26, the retailer disclosed plans for a $1.3 billion offering of convertible notes.
The convertible senior notes, which can ultimately be converted into equity, will be utilized for general corporate purposes, including the Bitcoin acquisition, as stated by the company.
“The retailer anticipates using the net proceeds from this offering for general corporate initiatives, which include the acquisition of Bitcoin in accordance with its Investment Policy,” the company mentioned.
On March 25, it was disclosed that a portion of corporate cash or future debt would be allocated to purchasing digital assets, such as Bitcoin and dollar-pegged stablecoins. The company reported cash reserves of $4.77 billion as of February 1, a significant increase from $921.7 million a year prior.
According to financial data, shares closed at $28.36 on the NYSE, reflecting an 11.65% increase for the day.
Stock performance on March 26.
The company recently reported a net income of $131.3 million for the fourth quarter of 2024 compared to $63.1 million in the same period the previous year. Although net sales decreased by $511 million year-over-year, the organization has been actively reducing expenses, which included the closure of 590 U.S. stores in 2024.
Previously, the company was at the forefront of the 2021 meme stock phenomenon when retail investors executed a “short squeeze” that significantly boosted the stock price. This led to losses for some hedge funds, framing the situation in a “David vs. Goliath” context.
Growing Number of Companies Embrace Bitcoin Reserve Strategy
This retailer is following in the footsteps of others, specifically a well-known tech company that incorporated Bitcoin into its treasury in August 2020. By December 2024, this tech company had experienced a stock increase of 3200% due to its crypto strategy.
A Japanese firm also announced plans to acquire 21,000 BTC by 2026, resulting in a 4800% rise in its stock price following the announcement. In its promotional materials, it noted an influx of new investors, with its market capitalization soaring by 6300%.
Another company demonstrated a similar spike in share price after revealing its intentions to purchase Bitcoin.
As reported, 32 publicly traded companies currently include Bitcoin on their balance sheets.
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