GameStop (GME) announces plan to issue up to $1.5 billion of convertible senior notes
Video game retailer GameStop has announced another plan to dilute shareholders with a convertible debt offering worth up to $1.5 billion.
GameStop is back in the news with another wave of shareholder dilution. The company announced plans to issue $1.3 billion of convertible senior notes with an additonal $200 million on the table as well.
GameStop posted this news to it's new investor relations website but here's the transcript:
GameStop Corp. (NYSE: GME) (“GameStop”) today announced that it intends to offer, subject to market conditions and other factors, $1.3 billion aggregate principal amount of 0.00% Convertible Senior Notes due 2030 (the “notes”) in a private offering (the “offering”) to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”). GameStop also intends to grant the initial purchasers of the notes an option to purchase, within a 13-day period beginning on, and including, the date on which the notes are first issued, up to an additional $200 million aggregate principal amount of notes.
The notes will be general unsecured obligations of GameStop, will not bear regular interest and the principal amount of the notes will not accrete. The notes will mature on April 1, 2030, unless earlier converted, redeemed or repurchased. Upon conversion, GameStop will pay or deliver, as the case may be, cash, shares of GameStop’s Class A common stock, par value $.001 per share (“Class A common stock”), or a combination of cash and shares of Class A common stock, at its election. The initial conversion rate, repurchase or redemption rights and other terms of the notes will be determined at the time of pricing of the offering. GameStop expects that the reference price used to calculate the initial conversion price for the notes will be the U.S. composite volume weighted average price of Class A common stock from 1:00 p.m. through 4:00 p.m. Eastern Daylight Time on the date of pricing.
GameStop expects to use the net proceeds from the offering for general corporate purposes, including the acquisition of Bitcoin in a manner consistent with GameStop’s Investment Policy.
Neither the notes, nor any shares of Class A common stock issuable upon conversion of the notes, if any, have been, or will be, registered under the Securities Act or any state securities laws, and unless so registered, may not be offered or sold in the United States, or to, or for the account or benefit of, U.S. Persons, absent registration or an applicable exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and other applicable securities laws.
This press release is neither an offer to sell nor a solicitation of an offer to buy any securities, nor shall it constitute an offer, solicitation or sale of any securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such jurisdiction. There can be no assurances that the offering of the notes will be completed as described herein or at all.
This is the third time in the last two years that GameStop has raised cash following an upward movement in the share price. The company issued nearly 100 million shares in 2024, raising nearly $4 billion of cash, so today's announcement of even more fundraising may come as a surprise to shareholders. The company will be sitting on over $6 billion following the completion of this convertible debt offering. While it is possible that this debt won't dilute shareholders, this is just another example of the contentious relationship between GameStop's management team and board of directors and the long-term shareholders who have been in the stock since 2020.
$GME It is an indisputable fact that we need to take the dilution button away from @ryancohen. pic.twitter.com/tyECAK4vGY
— Professor (@shortdestroyer) March 26, 2025
Investors and traders who are still waiting for the mother of all short squeezes (MOASS) to occur in GameStop now have yet another roadblock between them and their lambos. The company says that some of this money will be used to purchase Bitcoin. With billions of dollars on the balance sheet, a pivot to adding Bitcoin as a treasury asset in 2025 might just be another example of GameStop's management team having horendous timing. It wouldn't be the first time, following the NFT Marketplace failure that burned millions of dollars that were raised in 2021.
Only time will tell if GameStop is late to a trend again with Bitcoin already up a ton over the past few years, but do they really have no other ideas for turning around the video game retailer?
This article is only meant for educational purposes, and should not be taken as investment advice. Please consider your own investment time horizon, risk tolerance, and consult with a financial advisor before acting on this information.
Full Disclosure:
At the time of this article, Shacknews primary shareholder Asif A. Khan, his family members, or his company Virtue LLC had the following positions:
Long GameStop via GME shares
Long GameStop via GME call options
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