With this decision, GameStop aligns itself with a growing cohort of firms integrating crypto into corporate finance, most notably Strategy, whose aggressive Bitcoin strategy has fueled its stock’s meteoric rise.
With investor appetite for crypto exposure stronger than ever, GameStop’s latest gambit raises a pressing question: Could this trigger another rally in GME stock?
GameStop Starts Accumulating Bitcoin
GameStop has priced a $2.25 billion offering of 0% convertible senior notes due 2032, signaling plans to shore up its balance sheet and explore new strategic directions, including Bitcoin.
The notes, offered in a private placement under Rule 144A to qualified institutional buyers, are unsecured, interest-free, and set to mature on June 15, 2032.
They are initially convertible at $28.91 per share—a 32.5% premium to the current price—into GameStop’s Class A common stock.
An additional $450 million in notes may be issued if the purchaser exercises an option in full. The deal is expected to close by June 17.
The company said it expects net proceeds of approximately $2.23 billion, earmarked for general corporate purposes, investments, and potential acquisitions.
It can redeem the notes beginning in June 2029, subject to stock price thresholds, while holders have the right to demand repurchase in December 2028 or in the event of a fundamental change.
The financing comes as GameStop embraces Bitcoin as part of its Treasury Reserve strategy—a policy it quietly disclosed in March.
The company’s history with crypto has been uneven: it previously launched an NFT marketplace and sold a substantial amount of IMX, the token tied to Ethereum Layer-2 network Immutable X.
Shares fell 10% in after-hours trading to $25.64 following the announcement. GameStop stock is down 9.5% since March 26, when it first signaled its interest in Bitcoin.
Analyst Skepticism Amid Crypto Bet and Unclear Strategy
Wedbush analyst Michael Pachter warned that GameStop’s (GME) stock is driven more by speculative hype than fundamentals, as its strategy to revive its video game business remains vague.
He criticized the company’s recent over $500 million Bitcoin purchase, questioning why investors would pay a premium for a firm shifting cash into crypto instead of investing directly in Bitcoin or a related ETF.
Pachter maintained an ‘underperform’ rating with a $13.50 price target—55% below its recent $30.15 close.
Pachter said the firm faces major challenges as physical game sales decline and digital gaming trends accelerate, while GameStop lacks a clear growth strategy and leans heavily on speculative moves like crypto.
Is GameStop Profitable?
GameStop reported $732 million in net sales, down by 17% year-over-year and below analysts’ $754 million estimate.
However, net income was $45 million, a reversal from a $32 million loss in Q1 2024. Earnings reached 9 cents per share, up from an 11-cent loss last year.
Adjusted EPS came in at 17 cents, better than the 12-cent loss a year ago and beating analysts’ 4-cent forecast . The company credited cost-cutting and store optimization efforts.
In 2024, GameStop closed 590 U.S. stores as part of a broader cost-reduction strategy. This cut the cost of sales by 25% to $480 million and SG&A expenses by 23% to $228 million.
The store review will continue into 2025, with more closures expected.
Hardware and accessories sales dropped 32% and now account for 47% of total revenue, down from 57% a year ago.
Digital sales fell 27% to $176 million (24% of revenue, down from 27%). Meanwhile, collectibles jumped 54% to $211 million, now 29% of sales, up from 15%.
GameStop exited the Canadian and French markets in the first quarter, incurring $35 million in impairment costs, which will reduce future expenses and revenue.
GameStop Raised $1.3 Billion
The company plans to raise $1.3 billion through the private sale of convertible notes—debt that can later be exchanged for company stock.
The offering is limited to large, qualified investors, with an option to issue an additional $200 million in notes.
Key details of the notes:
- They do not pay interest like traditional bonds.
- They mature in 2030 unless converted earlier.
- Investors can convert them into cash, GameStop stock, or a combination of both at the company’s discretion.
GameStop intends to use the funds for general business purposes, including Bitcoin investments, as part of its broader strategy.
Will GameStop Mirror Bitcoin-Exposed Stocks?
