GameStop Corp. (GME) shares experienced a 11.7% decline in after-hours trading following the announcement of a $1.75 billion private offering of convertible senior notes. The move, extending the company’s debt financing strategy, could potentially fund further Bitcoin purchases.
GameStop shares also fell 5.34% to $28.55 during normal trading hours on Wednesday, after reporting a 17% year-over-year decline in first-quarter revenue the prior day, which impacted after-hours trading.
Recent Bitcoin Acquisition
While not explicitly stated, the $1.75 billion offering could support further investments aligning with GameStop’s policy. Earlier this month, a portion of a previous $1.5 billion convertible note issuance was used to acquire 4,710 Bitcoin (BTC), purchased on May 28 for approximately $513 million.
Convertible senior notes have become a popular instrument for corporations seeking to finance Bitcoin holdings. GameStop’s existing 4,710 BTC position ranks it 13th among public companies holding Bitcoin, according to BitcoinTreasuries.NET.
The notes, offering a 0% interest rate and due in 2032, include an option for initial purchasers to acquire an additional $250 million. The securities are convertible into cash, stock, or a combination at GameStop’s discretion.
Q1 Financial Results Context
The latest offering occurs alongside the release of GameStop’s Q1 results, which showed a $44.8 million profit, reversing a $32.3 million loss from the same quarter last year. However, the 17% revenue decline missed expectations and contributed to post-quarter sell-off.
Stock Performance Trends
GameStop’s stock has fallen 18.5% since confirming its initial Bitcoin purchase on May 28. Including the subsequent after-hours drop, the company’s shares have largely reversed gains accumulated since March 25, when it first announced Bitcoin investment plans.
The stock movement differs from typical reactions seen in other companies announcing Bitcoin-related initiatives.
Related: Crypto Titans Eye Major Fundraising Pushes Amid Bitcoin Market Growth
Further Reading: Pension Funds Facing Challenges in Navigating Crypto Investment Landscape
