(Bloomberg) — GameStop Corp. is seeking to sell $1.3 billion of convertible bonds with no coupon payment to fund Bitcoin purchases as it embraces a strategy that was developed by the cryptocurrency advocate Michael Saylor.
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The video-game retailer had rallied after the company said on Tuesday that its board approved a plan to add Bitcoin as a treasury reserve asset. That was followed on Wednesday with a filing announcing the planned sale of the bonds, which will be used for general purposes, including the acquisition of Bitcoin.
The Grapevine, Texas-based GameStop is marketing the notes with a 35% to 40% conversion premium, according to people familiar with the deal who asked not to be identified because the information is private. The convertible notes are due in 2030 and proceeds will be used in part to buy Bitcoin, the Wednesday filing said.
The company joins a growing list of public companies experimenting with taking on convertible debt to buy the digital asset in a bid to capitalize on upswings in Bitcoin. The tactic was pioneered by Saylor’s Strategy, the enterprise software company formally known as MicroStrategy, which has acquired more than $40 billion in Bitcoin and seen its share price soar.
GameStop’s entry into the market comes even as investors appear to be growing more skeptical of the strategy. The 35% to 40% premium that GameStop is looking to offer on its bonds is less than the the roughly 55% premium on a similar issue from Strategy in November, when markets were more receptive to these securities. More recently, Strategy made a $2 billion sale in February that had a 35% premium. That along, with the terms in a growing slate of debt-like instruments offered by Strategy, suggest that investors are demanding better terms.
GameStop fell after the filing was released, erasing some of the gains from earlier in the day, and shares were down 6.6% to $26.44 as of 5:30 p.m. New York time in after-market trading on Wednesday.
A spokesperson for GameStop didn’t immediately respond to a request for comment.
GameStop’s push to quickly ramp up its Bitcoin purchases comes against a starkly different backdrop than when Strategy and other copycats flooded the market at the end of 2024. The cryptocurrency is down roughly 18% from an all-time high in January and investors are bailing on a variety of risky assets amid tariff uncertainty and choppy economic data.
