tl;dr
GameStop increased its convertible senior notes offering to $2.25 billion from $1.75 billion. The company’s shares fell 24% over the week, closing at $22.14, below the $28.91 conversion price of the new bonds. The zero-interest bonds carry a 32.5% premium over the stock price. GameStop bought 4,710 ...
GameStop has increased its convertible senior notes offering to $2.25 billion from the initial $1.75 billion, aiming to use the proceeds for general corporate purposes, including potential investments and acquisitions. Despite this, the company’s shares fell 24% over the week, closing at $22.14, which is below the $28.91 conversion price of the new zero-interest bonds. These bonds carry a 32.5% premium over the current stock price.
Last month, GameStop purchased 4,710 Bitcoin, but CEO Ryan Cohen indicated that future Bitcoin purchases are uncertain and will not be publicly announced. This cautious stance contrasts with companies like MicroStrategy, which have actively increased Bitcoin holdings to enhance shareholder value. The company’s stated use of funds includes investments consistent with its investment policy and acquisitions.
Aligning with its retail roots, GameStop is shifting focus toward trading cards, which made up 29% of first-quarter sales. CEO Cohen described this move as a natural extension of their business, highlighting the vibrant trading card market in sports, Pokémon, and collectibles. This pivot comes after previous attempts to broaden the business, such as an NFT marketplace that was discontinued early last year.
Earlier this year, the announcement of the bond offering and potential increased Bitcoin investment influenced market reactions, contributing to share price volatility. The bonds’ conversion price is set near a 32.5% premium to the current stock price, reflecting investor expectations about the company’s strategic direction and market opportunities.