GameStop has announced an increase in its planned convertible note offering from $1.75 billion to $2.25 billion.
Increase in Note Offering Size
According to the company's press release, the notes, which do not pay interest and are due in 2032, will be sold privately to institutional investors. Buyers are given the option to purchase an additional $450 million worth of notes, which could bring the total to $2.7 billion.
Funding and Use of Proceeds
The company expects the sale to close on June 17. After fees and costs, GameStop expects to receive about $2.23 billion, which could rise to $2.68 billion if additional notes are sold. The funds will go towards general business needs, including investments and possible acquisitions.
Market Reaction and Company Strategy
The announcement of the initial $1.75 billion offering triggered a sharp 20% selloff in GameStop shares. Shares fell another 5% on June 12 as investors weighed potential dilution and the company's continued crypto pivot. GameStop is one of several public companies currently holding substantial amounts of Bitcoin.
The increase in convertible note offerings reflects GameStop's efforts to adapt to changing market conditions and seek new directions for business recovery.
