GameStop, a prominent video game retailer, has announced plans to issue $1.75 billion in senior convertible notes under Rule 144A of the Securities Act. These bonds are being offered privately to qualified institutional buyers. Initial purchasers may have an option to purchase up to an additional $250 million in notes within 13 days after issuance. The notes offer no interest and mature on June 12, 2032, with settlement options including cash, Class A common stock, or a combination of both.
Is GameStop looking to increase its Bitcoin holdings?
The bond offering has sparked debate among experts about whether the proceeds will be used to acquire more Bitcoin. However, some analysts believe this move could help GameStop expand services in the gaming sector. Notably, the company made its first official investment in Bitcoin through a purchase of 4,710 Bitcoins valued at $513 million earlier this year. This new bond issuance will be used for general purposes, including potential investments and acquisitions as outlined by GameStop’s investment policy. The current value of GameStop’s Bitcoin holdings is $506.96 million, a slight decrease from its initial investment in the cryptocurrency.
GameStop Stock Analysis
The stock price saw a decline of 5.31% in the latest trading session, closing at $28.55. Over the past week and year, GameStop stock has experienced declines of 4.52% and 10.33%, respectively. It’s currently trading above its 20-day, 50-day, 100-day, and 200-day exponential moving averages, with the annual price target surpassing the expected value by 52%. In Q1 2025, GameStop reported $732.4 million in revenue with a net income of $44.8 million and a net margin of 6.12%. Last quarter’s performance (Q4 2024) yielded $1.28 billion in revenue and $131.3 million in net income, with a net margin of 10.24%. GameStop is expected to generate $3.52 billion in revenue this year, with estimated earnings per share (EPS) of $0.72, significantly higher than the previous year’s $0.07. The company’s current market capitalization sits at $12.77 billion, a drop of 11.23% from its 2024 end value of $14.38 billion.