GameStop is fuelling its Bitcoin ambitions with another massive cash infusion. The video game retailer announced a new $1.75 billion fundraising effort late Wednesday. This move signals a potential major expansion of its cryptocurrency holdings. Immediately, investors reacted negatively, sending shares tumbling.
The company plans to issue convertible senior notes worth $1.75 billion. Significantly, these notes carry zero regular interest. They mature in June 2032 unless converted or repurchased earlier. Moreover, initial buyers get an option. They can purchase an extra $250 million in notes within two weeks. However, this offering targets only qualified institutional buyers.
Following the Bitcoin Blueprint
GameStop clearly signalled its crypto intentions months ago. In March, it formally updated its investment policy. This policy specifically added Bitcoin as a treasury reserve asset. Subsequently, the company raised $1.3 billion through similar notes in April. Then pressure from decisively in May. GameStop purchased 4,710 Bitcoin for approximately $500 million.
Proceeds from this latest raise will serve “general corporate purposes”. Importantly, this includes “making investments” aligned with that March policy. Therefore, further Bitcoin acquisitions are widely anticipated. The company already holds substantial cash reserves. As of Q1 2025, it reported $6.4 billion in cash and equivalents.
Investors Voice Concerns Instantly
Wall Street expressed immediate scepticism about the new funding. Following the announcement, GameStop’s stock (GME) plunged. Shares fell sharply by 10% in after-hours trading Wednesday. This decline continued a downward trend. Earlier, the stock had already dropped 5% during the regular session. Ultimately, shares settled around $25.23.
Investors clearly worry about potential share dilution. Convertible notes can often be exchanged for stock later. Furthermore, analysts question the stock’s premium valuation. They note it trades significantly higher than its cash value. Comparatively, MicroStrategy trades closer to its Bitcoin holdings’ value. Critics suggest investors could buy Bitcoin directly instead.
What Comes Next for GameStop?
The market now watches GameStop’s next moves closely. Will it deploy this new capital into Bitcoin rapidly? Previously, it moved quickly after its April raise. The company acquired its initial 4,710 BTC throughout May. Currently, it holds no additional Bitcoin beyond that first purchase.
GameStop joins a growing corporate trend. Presently, over 100 public companies hold Bitcoin as treasury reserves. MicroStrategy pioneered this strategy aggressively. Tesla also maintains a large Bitcoin position. Nevertheless, GameStop’s core retail business faces challenges. Revenue fell 17% year over year in Q1 2025. Digital gaming shifts pressure physical sales. Hence, Bitcoin represents a bold diversification attempt.
CEO Ryan Cohen hasn’t pre-committed to specific purchases. Still, the company’s actions speak volumes. Raising another $1.75 billion, potentially reaching $2 billion, provides immense firepower. Consequently, the market widely expects significant Bitcoin buying soon. GameStop’s high-risk crypto pivot continues, reshaping its future.
Written By Fazal Ul Vahab C H
