GameStop’s latest convertible senior note proposal pushed the stock price down further just days after Q1 revenue missed expectations.
GameStop (GME) shares fell 11.7% in after-hours trading after announcing a $1.75 billion private convertible senior note offering — extending its debt financing strategy that could fund additional Bitcoin purchases.
GME had already slid 5.34% to $28.55 during normal trading hours on Wednesday after GameStop reported a first-quarter revenue fall of 17% in after-hours the day before.
GameStop recently bought $513 million in Bitcoin
The US video game and consumer electronics retailer didn’t explicitly state that the proceeds would be used to fund additional Bitcoin purchases, but said it intends to make investments in a manner consistent with GameStop’s investment policy in addition to potential acquisitions.
Part of GameStop’s most recent $1.5 billion raise through convertible notes was used to purchase 4,710 Bitcoin (BTC) — worth $513 million at the time — on May 28.
Convertible senior notes have been an increasingly common financial instrument for public companies seeking to bolster their Bitcoin treasuries.
GameStop’s 4,710 Bitcoin stash currently positions it as the 13th largest corporate Bitcoin holder, according to BitcoinTreasuries.NET data.
The $1.75 billion private offering carries a 0% interest rate, with the convertible senior notes due on June 15, 2032.
The offering includes an option for initial purchasers to buy an additional $250 million in notes.
Related: The Blockchain Group to raise $340M for Bitcoin treasury
The notes are convertible into either cash, GME stock, or a mix of both, depending on GameStop’s decision.
GameStop fell earlier on Q1 results
The latest offering comes as GameStop reported a $44.8 million profit in the first quarter, reversing a $32.3 million loss from Q1 2024.
However, revenues fell 17% to $732.4 million, missing industry expectations and triggering a considerable fall in after-hours on June 10.
GME shares have been down since first Bitcoin purchase
According to Google Finance, GME shares have fallen 18.5% since GameStop confirmed its first Bitcoin purchase on May 28.
When factoring in the 11.7% fall in after-hours, GameStop has now erased all the gains it made since March 25, when it first announced plans to invest in Bitcoin.
GME’s stock movement contrasts with most public companies that have seen their share prices rise after announcing Bitcoin purchases or plans to do so.
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