GameStop is set to proceed with a private offering totaling $1.3 billion in convertible senior notes aimed at financing general corporate activities and Bitcoin (BTC) acquisitions for its treasury, as revealed in a March 26 statement.
This news comes shortly after GameStop’s March 25 announcement detailing a revised treasury strategy that incorporates digital assets.
Although the specific amount of Bitcoin intended for purchase wasn’t disclosed, the filing indicated that a portion of the raised capital will facilitate the integration of Bitcoin into its financial framework.
This initiative aligns with a broader trend where companies are adding Bitcoin to their treasury reserves, although such endeavors have mostly been seen among tech and fintech enterprises.
By directing funds towards Bitcoin, the company communicates a strategic intent to diversify its cash holdings, which exceed $4.5 billion.
The approach of issuing debt to buy Bitcoin has gained traction, with this strategy planned to contribute to acquiring part of the 500,000 BTC in the treasury. The aim is to raise $42 billion by 2027 to further bolster Bitcoin holdings.
Offer of Convertible Notes
The zero-coupon convertible senior notes, set to mature on April 1, 2030, will be offered through a private placement to accredited institutional buyers in accordance with Rule 144A of the Securities Act of 1933.
These securities will represent unsecured obligations of GameStop and will not accrue regular interest or principal. Upon conversion, the company may fulfill its obligations with cash, Class A common stock, or a combination of both, at its discretion.
Initial details, including the conversion rate, redemption rights, and repurchase options, will be determined at the time of pricing, which will be based on the US composite volume-weighted average price (VWAP) of GameStop’s Class A shares on the pricing date.
Additionally, the company has granted initial purchasers a 13-day option to acquire up to an extra $200 million in notes. If fully exercised, this offering could increase the total capital raised to $1.5 billion.
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