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GameStop Issues $1.75 Billion Convertible Bonds
Raising Funds to Buy Bitcoin?
Issuance of $1.75 Billion Convertible Bonds
American video game retailer GameStop announced on Wednesday its plan to issue $1.75 billion of 0% Convertible Senior Notes maturing in 2032 through a private placement under Rule 144A, with final terms to be determined based on market conditions and other factors. According to the announcement, these bonds will be convertible into shares of GameStop’s Class A common stock, cash, or a combination of both, with specific conversion terms to be established at pricing.
GameStop stated that the initial bond issuance amount is $1.75 billion and will grant the initial underwriters an option to purchase up to an additional $250 million of the bonds, exercisable within 13 days from the issuance date (inclusive). The bonds are expected to mature on June 15, 2032, unless converted, redeemed, or repurchased earlier.
According to previous reports from Zombit, the company raised $1.5 billion through private convertible notes in early April, explicitly stating in its filing with the SEC that the funds were intended for purchasing Bitcoin. However, this time GameStop only indicated that the funds would be used for “general corporate purposes, including investment activities in accordance with the company’s investment policy, as well as potential acquisitions in the future.” Nonetheless, this statement also represents a considerable degree of flexibility in the company’s use of funds and does not exclude the possibility of purchasing Bitcoin or other crypto assets.