TBW - GameStop becomes a "Bitcoin Company" too
GameStop has completed an ambitious $1.5 billion financing deal, issuing a zero-interest convertible bond due 2030, the terms of which reflect an opportunistic financial strategy.
In the SEC filing, the company states that the net proceeds of $1.48 billion may be used for "general corporate purposes", including the acquisition of bitcoin, a move that confirms its shift towards alternative assets.
An oversubscribed, interest-free issue
Finalised on 1 April 2025, the private issue comprises a $1.3 billion main tranche as well as a $200 million over-allotment option exercised in full. The bond, described as Convertible Senior Notes, has a coupon rate of 0%, a structure that allows GameStop to avoid coupon payments until maturity in 2030. It thus relies entirely on potential share appreciation, and market confidence in the company's future trajectory.
This lack of yield is offset by a generous conversion option. The initial conversion price has been set at $29.85 per share, a 37.5% premium to the weighted average share price on 27 March.
In plain English: GameStop is borrowing for free and investors will have the choice, in 2030, of being repaid in cash or shares. Investors are betting that GameStop's share price will have risen significantly as a result of its Bitcoin accumulation strategy.
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Cash focused on Bitcoin
But the most intriguing aspect of the deal is the intended use of the funds. The company mentions, in black and white, its intention to use part of the proceeds to acquire bitcoin, "in line with its investment policy".
No precise amount is mentioned at this stage, but this direction confirms a change of DNA already begun in recent years: after venturing into the territory of NFTs, and then Web3, GameStop seems to want to capitalise on the appreciation of the benchmark digital asset, rather than being content with traditional cash investments.
This choice comes against a macroeconomic backdrop in which the question of the depreciation of the dollar and the growing attraction of safe havens is fuelling the strategic thinking of some technology companies.
GameStop thus joins the still small club of listed companies that have made bitcoin a component of their balance sheet - like Strategy (formerly MicroStrategy), Tesla, Metaplanet and French company The Blockchain Group.
>> Alexandre Laizet (The Blockchain Group): "We are in a way the European MicroStrategy"
A risky strategy but one aligned with its speculative profile
This financing package is part of a rationale for repositioning GameStop, a company long considered to be in decline, then revitalised by the meme stock phenomenon. Rather than seeking to return to being a traditional distributor, the firm seems to be fully embracing its new role as a speculative vehicle structured around strong convictions in the financial markets.
For investors, the gamble is not without risks: the lack of interest, the volatility of the GME share, and the exposure to Bitcoin create an atypical profile in the convertible bond universe. But for GameStop, the deal allows it to raise capital at zero cost, while retaining an equity backstop option if its share price were to rise sharply.
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