GameStop, the video game retailer, has completed a $1.5 billion scrip capital raise, part of which will be used to purchase Bitcoin and US dollar-backed stablecoins. According to a U.S. filing from April 1, the company revealed the completion of its convertible debt offering. Securities and Exchange Commission (SEC).
The capital raise was expected to be at $1.3 billion. However, the demand was impressive and hence increased to $1.5 billion. The company’s debt can eventually be converted into shares of the company. Initially, the debt may be converted at 33 GameStop shares for every $1,000 of debt.
The company revealed the news in a filing last month, saying that the board unanimously approved the investment plan on March 25. Unless converted or repurchased sooner, the notes will expire on April 1, 2030.
Though GameStop bought lots of Bitcoin, the price moved. On March 26, the announcement saw the stock pop (rise) almost 12%, but that rally caused a massive tumble of almost 24% the next day. After they finished collecting money on April 1, GameStop shares closed the day at $22.61, up modestly by 1.34%. It saw minor gains in after-market hours.
GameStop’s decision to move comes as more and more public companies get into Bitcoin, made popular by MicroStrategy’s Michael Saylor. As of February 1, the retailer had $4.77 billion in cash, up from $921.7 million a year ago. With that amount of cash on hand, the company can make substantial digital asset investments.
Previously, GameStop launched a crypto wallet in 2022 to help customers store and transfer their digital assets. However, regulatory uncertainty led to the closure of the wallet service in November.
The company garnered widespread attention during the 2021 meme stock saga when retail investors executed a short squeeze that drove up GameStop’s shares by over 1,000% within a month. Despite its recent Bitcoin investment, investors appear to be negative or fearful of the company in the long term.
