GameStop will issue $1.3 billion in interest-free convertible bonds to buy Bitcoin.

The meme stock pioneer and video game retail chain GameStop, after announcing its participation in the Strategy Bitcoin reserve strategy, is preparing to issue $1.3 billion in convertible bonds to raise funds to buy Bitcoin. GameStop's stock price ( with the ticker GME) surged over 11% yesterday due to the Bitcoin reserve news, but fell 8% in after-hours trading following the announcement of the convertible bond news. As companies adopting Bitcoin reserve strategies continue to emerge, whether investors will buy in may depend on the pricing of the convertible bonds and the amount of funds raised.

(GameStop joins the ranks of companies adopting Bitcoin reserve strategies! Is the meme frenzy about to return? )

GameStop plans to issue $1.3 billion in zero-coupon convertible bonds.

GameStop announced the private issuance of convertible preferred notes (, commonly known as convertible bonds ), which will mature in 2030. GameStop also intends to grant the initial purchasers of the notes an option allowing them to purchase notes with a total principal amount of up to an additional $200 million within 13 days from the date of the notes' initial issuance.

The notes will be general unsecured debt of GameStop, will not accrue regular interest, and the principal of the notes will not accumulate. The notes will mature on April 1, 2030, unless converted, redeemed, or repurchased earlier. Upon conversion, GameStop will pay or deliver cash, GameStop Class A common stock, or a combination of cash and Class A common stock, as applicable. The initial conversion rate, repurchase or redemption rights, and other terms of the notes will be determined at the time of issuance pricing.

GameStop expects to use the net proceeds from this issuance for general corporate purposes, including acquiring Bitcoin in a manner consistent with GameStop's investment policy.

Bitcoin reserve strategy companies are continuously emerging, are investors still buying in?

The pioneer of Bitcoin reserve strategy, Strategy, announced the Treasury Reserve Policy as early as September 2020. This is a policy that uses Bitcoin as the company's main reserve asset. In addition to utilizing cash flow generated from its core business, the company also raises funds through debt and equity financing to continuously purchase Bitcoin.

Currently, about 80 listed companies globally, including mining companies, pharmaceutical companies, and advertisers, are buying Bitcoin to replace their cash reserves.

According to GameStop's latest financial report, its revenue for the fourth quarter decreased by 28% year-over-year to $1.28 billion, and it will close more stores. Sales of hardware, accessories, and software declined this season, but sales of collectibles increased.

With the slowdown of the gaming business, GameStop has been seeking diversification. Will this Bitcoin business bring new opportunities for it?

(Strategy leads the trend, a detailed explanation of Bitcoin reserve strategy company investment guide )

GameStop stock price ( stock code GME) surged over 11% yesterday due to news of Bitcoin reserves, but fell 8% in after-hours trading due to the announcement of convertible bond news. Whether investors will buy in may still depend on observing the pricing of the convertible bonds and the amount of funds raised.

This article GameStop will issue $1.3 billion non-interest convertible bonds to buy Bitcoin first appeared in Chain News ABMedia.