GameStop Moves Into Bitcoin With $1.3 Billion Investment Plan, Stock Reacts

GameStop is making a big move into cryptocurrency, announcing plans to raise up to $1.3 billion through convertible debt to expand its Bitcoin reserves. This decision comes just a day after the company revealed its Bitcoin treasury strategy, marking a major shift toward digital assets.

GameStop’s Plan to Raise Funds

The company plans to issue $1.3 billion in convertible senior notes, aimed at qualified institutional buyers. These notes will mature in five years, and GameStop has also given initial buyers a 13-day option to purchase an additional $200 million in notes. If fully exercised, the total amount raised could reach $1.5 billion.

The notes will not carry any interest and will mature on April 1, 2030, unless converted, redeemed, or repurchased earlier. GameStop intends to use the funds for general corporate purposes, including buying Bitcoin as part of its investment policy.

GME Follows MSTR’s Strategy

With this move, GameStop joins companies like Michael Saylor’s Strategy (MSTR), Semler Scientific (SMLR), Marathon Digital (MARA), and Riot Platforms (RIOT), which have also issued convertible debt to fund Bitcoin purchases.

MicroStrategy’s co-founder, Michael Saylor, even launched a poll on social media platform X, asking how much Bitcoin GameStop needs to buy to gain respect from the Bitcoin community.

Stock Market Reaction

Despite excitement over its Bitcoin strategy, GameStop’s stock dropped more than 8% in after-hours trading on Wednesday following the announcement. This decline came after the stock had surged 12% the day before, when the company confirmed that its board had approved adding Bitcoin to its treasury reserves.

The drop may be due to concerns over possible share dilution, a common risk when companies raise funds through convertible debt. However, if GameStop’s Bitcoin strategy follows the success of MicroStrategy, it could lead to long-term stock growth.

Meanwhile, Bitcoin itself rebounded from $86,000 to $87,000 after an earlier dip.

Growing Interest in Crypto

GameStop’s interest in Bitcoin had been rumored for some time. A month ago, CNBC reported that the company was exploring cryptocurrency investments. Speculation grew when CEO Ryan Cohen was seen with Michael Saylor, whose company MicroStrategy now holds over 447,000 Bitcoins.

Wall Street Remains Uncertain

While MicroStrategy’s Bitcoin strategy has helped its stock climb 84% over the past year, analysts remain cautious about GameStop’s move. Investors are still unsure whether a video game retailer’s Bitcoin investment will lead to similar success or if it’s a risky bet.

As GameStop takes this leap into the crypto space, the market will be watching closely to see whether this strategy strengthens the company’s position or leads to more stock volatility.