- Gamestop issues $ 1.3 billion convertible banknotes to finance Bitcoin acquisition and operating costs.
- GME shares increases 11% as the speculation of the retail rises in the midst of the Bitcoin -Treasury strategy.
Gamestop makes a strategic shift to Bitcoin [BTC]” announcement A senior convertible of $ 1.3 billion to partially finance its BTC acquisition.
Only one day after the acceptance of Bitcoin as part of its financial strategy, the company also confirmed its intention to attract extra capital due to convertible debts.
This includes a duration of five years and a coupon of 0%, which may increase to $ 1.5 billion if insurers exercise their extra allocation.
For those who are not aware, the move, unanimously approved by its board, corresponds to a growing trend of public companies that integrate Bitcoin into their business treasury, in which the approach is reflected, developed by strategy.
Gamestop’s Crypto strategy
The decision followed the increasing pressure of investors, including Strive Asset Management CEO Matt Cole, in which Gamestop’s leadership encouraged to use his surplus cash reserves for Bitcoin investments.
Noted the press release,
“Gamestop expects to use the net revenue of the offer for general business purposes, including the acquisition of Bitcoin in a way that is consistent with Gamestop’s investment policy.”
This aggressive step means the deeper dedication of gamestop for cryptocurrency as a hedge and value driver for shareholders.
The newly announced convertible notes from Gamestop have been set to mature on 1 April 2030, unless previously exchanged or converted.
These banknotes remain unsecured and will not build up regular interest rate, so that their main value is maintained during the posture period.
Although Gamestop has confirmed that the proceeds will be allocated to general business purposes and Bitcoin acquisition, it has not unveiled the exact part dedicated to BTC purchases.
Impact on crypto and memecoin market
After the announcement, GME shares experienced an increase of 11%, as a result of a strong importance of investors.
The wrinkle effect reached further than shares, with meme coins such as dogecoin [DOGE]Shib Inu [SHIB]Pepe Coin [PEPE]and floki [FLOKI] Recording consecutive days of profit.
At the last check, GME traded for $ 28.36, which marks an increase of 11.65% in 24 hours, while Bitcoin saw A slight dip of 0.87%, trading at $ 87,478.60.
Critics are still staying
Despite such a profit, however, this step was criticized by Wedbush analyst Michael tenant, who said in a conversation with Yahoo Finance,
“The company’s strategy, which has changed about six times in three years, is that they are going to buy cryptocurrency and be just like MicroSstratey. If Gamestop were to buy all Bitcoin with their $ 4.6 billion in cash and trade on their Bitcoin holdings twice, the shares would drop five dollars.”
Yet not all execs were crucial about this update as QCP analysts put it best when he said in one remark For investors,
“Although this is not a first in the story of the company adoption, the symbolic weight of the meme status of GME status could reflect speculative among retailing participants. While the PlayBook 2021 reminds us, retail flows, if coordinated, the power to fight institutional positioning.”
