GameStop seeks to secure $2 billion via convertible bond issuance.
GameStop, the video game retail giant, has been making headlines lately with its foray into cryptocurrency and its ongoing financial maneuvers.
In a significant move, the company announced on March 25 that it would allow for the purchase of Bitcoin. Since then, GameStop has made its first Bitcoin purchase, acquiring 4,710 Bitcoin on May 28. The purchase was made after May 3, implying a purchase price of at least $93,000 per coin.
However, the company's stock price has been on a downward spiral in recent weeks. This followed the press release announcing the issuance of convertible bonds, with GameStop aiming to raise an additional $1.75 billion. The issuance, completed on April 1, brought in $1.48 billion.
The issuance of these convertible notes allows GameStop to raise funds for general corporate purposes, including potential acquisitions and investments in line with its investment policy. Interestingly, the latest issuance does not explicitly mention Bitcoin.
GameStop's board unanimously approved an update to its investment policy to include Bitcoin as a reserve asset. However, since the initial purchase on June 10, 2021, there has been no announcement of any additional Bitcoin purchases.
If GameStop succeeds in raising the full $2 billion through the issuance of convertible bonds, the company would theoretically have almost $8 billion available for the purchase of additional Bitcoin. This could potentially make GameStop the corporation with the second-largest Bitcoin reserve, surpassed only by MicroStrategy.
Bitcoin analyst Thomas Fahrner humorously pointed out that GameStop CEO Ryan Cohen is copying the strategy of MicroStrategy or Michael Saylor, but without actually buying Bitcoin. This observation was made due to the continuous issuance of convertible notes by GameStop, which could potentially be used for Bitcoin purchases.
Tristan, the editor-in-chief at Blocktrainer.de and an active Bitcoin enthusiast since 2020, has been closely following GameStop's Bitcoin strategy. As of the latest available information, GME is currently trading below the level of March 25, when the company announced the start of its Bitcoin strategy.
In a tweet, GameStop CEO Ryan Cohen reposted a statement implying that the company had botched its entry into Bitcoin. The implications of this statement and the future direction of GameStop's Bitcoin strategy remain to be seen.
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