GameStop has announced plans to raise $1.3 billion through convertible bonds to purchase Bitcoin and diversify beyond its declining retail business, echoing a playbook popularized by MicroStrategy’s Michael Saylor.
Background
- GameStop Corp., the video game retailer-turned-meme stock sensation, is embracing Bitcoin as part of its treasury strategy.
- On Tuesday, the company’s board approved the addition of Bitcoin to its balance sheet. The next day, GameStop filed to sell $1.3 billion in convertible bonds due in 2030.
- These funds are earmarked for general corporate use, with Bitcoin acquisition being a key focus.
- This move follows in the footsteps of MicroStrategy, which famously began using corporate funds — and later, convertible debt — to amass more than $40 billion worth of Bitcoin since 2020.
- Convertible bonds are hybrid securities that can be turned into stock under certain conditions, making them attractive to both companies and investors, particularly in volatile market conditions.
Why Should You Pay Attention?
- GameStop’s pivot underscores how Bitcoin is becoming more embedded in corporate finance — not just as an asset, but as a hedge and strategic tool.
- By raising debt rather than using existing cash reserves, GameStop is opting for a higher-risk, higher-reward path to potentially boost its share price and transform its business model.
- It’s a significant signal that crypto adoption is shifting from tech-native firms to legacy retail brands.
- Moreover, the move adds fuel to ongoing debates about using debt to acquire speculative assets. While it has worked for MicroStrategy so far, investor skepticism around the approach is growing, especially given the current market backdrop.
Who Said What?
One anonymous source close to the deal told Bloomberg:
“We’re seeing the next phase of Bitcoin’s role as a corporate reserve asset.”
- CEO Ryan Cohen — who became a central figure in GameStop’s turnaround and meme-stock identity — has remained tight-lipped on specifics, but hinted at the direction by posting a photo with MicroStrategy’s Michael Saylor in February.
- Convertible bond insiders say the terms include a 35–40% premium, lower than earlier MicroStrategy deals, suggesting more caution among investors.
Zooming Out
- GameStop’s Bitcoin bet highlights the ongoing evolution of corporate crypto adoption — from digital-native firms to legacy retailers seeking reinvention.
- The company’s fundamentals remain under pressure, with Q4 revenue down 28% and store closures on the rise. Yet its stock remains volatile and popular among retail traders, making it fertile ground for speculative strategies.
- As other companies weigh the risks and rewards of a Bitcoin treasury strategy, GameStop’s next steps could either validate or caution against this emerging corporate playbook.
- One thing is clear: in the eyes of the market, Bitcoin is no longer just a hedge — it's becoming a business model.
