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GameStop Corp. (NYSE:GME) announced today that it intends to raise $1.3 billion through a private issuance of convertible premium notes and will use the net proceeds from the product for general corporate purposes, including the acquisition of Bitcoin. The move comes the second day after the company revealed its investment policy updates, allowing Bitcoin to be used as a fiscal reserve asset.
The issuance includes $1.3 billion of a 0.00% convertible premium notes that expire in 2030. Additionally, the company plans to grant the initial buyer an option within 13 days since the first issuance date to purchase up to $200 million in notes. Notes will be generally unsecured and will not assume any periodic interest or appreciation of value. Unless converted, redeemed or repurchased, they will mature on April 1, 2030.
After conversion, GameStop has the option of settled cash, stocks of Class A common stock, or a combination of both. The initial conversion rate and other terms will be determined at the time of pricing. The company said it expects to use the average stock average price of U.S. stocks from 1:00 pm to 4:00 pm on the pricing date Eastern daylight time as a reference for the initial conversion price.
GameStop stressed that neither the converted notes nor any issuable common stock was registered under the Securities Act of 1933 or any state securities law. As a result, they may not be offered or sold in the United States without registration or applicable waivers. The company also said there is no guarantee that the product will be completed as stated or at all.
This marks a major financial decision by GameStop as it spins the integration of Bitcoin into its corporate strategy. Michael Saylor of Strategy pioneered a strategy, meeting in person with GameStop CEO Ryan Cohen last month and appeared to have had an impact on GameStop’s decision to use BTC as a reserve asset.