GameStop to Raise $1.3B in Bonds to Buy Bitcoin
GameStop plans to raise $1.3B through convertible bonds to buy Bitcoin, following a strategy made popular by crypto advocate Michael Saylor.
GameStop Corp. is planning to raise $1.3 billion through a convertible bond offering to fund a large-scale Bitcoin purchase, following a path made popular by crypto advocate Michael Saylor. The company announced that its board has approved adding Bitcoin to its treasury reserve, marking a significant shift in strategy. The bond sale, disclosed in a filing, is meant for general corporate purposes, including the acquisition of Bitcoin.
The move places GameStop among a growing list of public firms choosing to use convertible debt to invest in digital assets. This method was first adopted by Saylor’s company, MicroStrategy, which has accumulated over $40 billion in Bitcoin and experienced massive growth in its stock value as a result.
A convertible bond gives investors the option to turn their bonds into company shares if the stock price reaches a certain level. GameStop is offering bonds maturing in 2030 with a conversion premium between 35% and 40%, according to sources familiar with the terms. This premium is the rate at which bondholders can exchange their bonds for shares if the stock rises.
Compared to MicroStrategy’s earlier bond issues, GameStop’s offering comes with a lower premium. MicroStrategy’s bond sale last November carried a 55% premium, while another $2 billion issuance in February offered a more favorable 35% premium for investors. These changing terms suggest that the market is becoming more cautious and investors now expect better deals.
Following the announcement, GameStop’s stock saw a decline in after-hours trading, falling 6.6%. This drop erased gains made earlier that day, reflecting some market hesitation around the company’s aggressive pivot toward cryptocurrency. As of 5:30 p.m. in New York, shares were trading at $26.44.
A GameStop spokesperson declined to comment when contacted. The company’s move into Bitcoin comes at a time when the market is facing increased pressure. Unlike late 2024, when MicroStrategy and other firms rushed into crypto investments, the current environment includes falling crypto prices, global trade tensions, and uncertain economic indicators.
Bitcoin itself is currently trading well below its all-time high from January, down roughly 18%. Meanwhile, risk appetite among investors has cooled, with many pulling back from volatile assets. Still, GameStop is moving forward with its plan, betting that Bitcoin’s long-term value will justify the risk.
By aligning itself with MicroStrategy’s strategy, GameStop is making a bold statement about its future direction. Whether this gamble pays off will depend on the crypto market’s recovery and investor confidence in the company’s leadership.
