GameStop Upsized Convertible Senior Notes Offering
GameStop upsized its latest offering of convertible senior notes to $2.25 billion from $1.75 billion, the video game retailer said in a press release published late on Thursday.
Shares dropped earlier this week after the Grapevine, Texas-based firm said that it would offer investors more convertible bonds, following a similar, $1.5 billion raise in April.
Although GameStop shares held ground on Friday, they fell 24% throughout the week, closing at $22.14, according to Yahoo Finance. Shares changed hands around $28.36 when GameStop said that it had the ability to start buying Bitcoin in late March.
The company’s latest batch of convertible bonds, which will bear no interest, will have a conversion price of approximately $28.91 per share, which may change “in some events,” GameStop said in the press release on Thursday. That represented a 32.5% premium compared to the company’s average stock price on Thursday afternoon Eastern Time, it added.
Companies like Strategy, MicroStrategy, have been able to grow the amount of Bitcoin they own per share—that’s the company’s stated aim for maximizing shareholder value—by raising funds at a premium relative to their Bitcoin holdings and shoveling that cash into the asset.
With GameStop, whether the company will make another Bitcoin purchase is less clear. GameStop purchased 4,710 Bitcoin last month, but in a recent interview, company CEO Ryan Cohen said that the company will not telegraph future purchases and isn’t following any other firm that’s buying the leading cryptocurrency by market value.
In the press release, GameStop reiterated that proceeds from the offering will be used for “general corporate purposes, including making investments in a manner consistent with GameStop’s Investment Policy and potential acquisitions.”
The brick-and-mortar retailer tried to expand beyond selling video games and consoles years ago by launching an NFT marketplace, which was shuttered early last year. At the company’s annual shareholder meeting, Cohen recently said that GameStop would embrace trading cards, which made up 29% of first-quarter sales, per Fortune.
“We’re focusing on trading cards as a natural extension of our existing business,” he said. “The trading card market, whether it’s sports, Pokémon or collectibles, is aligned with our heritage.”
Edited by James Rubin