Gamestop stock plummets as company announces $1.75 billion debt offering amid bitcoin push

Gamestop (GMEThe shares fell up to 19 % in early trading on Thursday after the video game seller announced that he intends to sell $ 1.75 billion of convertible bonds.

In other words, Gamestop collects money from investors by issuing debts in the form of convertible notes. Investors will convert notes to Gamestop shares before or when they ripen in 2032, reduce the shares and may weigh the value of the arrow.

Gamestop said it would use the proceeds from selling convertible bonds for potential investment and acquisition. In May, the company announced Buy $ 500 million From Bitcoin.

Thursday’s advertisement follows another large debt offer, with the sale of the company $ 1.3 billion of convertible bonds In March.

Gamestop is a Mim share known for its unprecedented gathering in 2021, led by retail dealerships at Reddit Group R/Wallstreeetbets. In the month of March, the company has updated its investment policy to add Bitcoin as the assets of the treasury reserves, “and it carries the coded currency on its public budget as part of its Treasury Ministry.

The smaller and low -growing companies were like Gamestop In the footsteps of the software company in Michael Silor ((MstrUsing a mixture of debt and fairness to add Bitcoin to its public budget in the hope of repeating the success of the stock price.

But investors are concerned that such bets are risky because bitcoin can be volatile.

The “main danger in managing the” Treasury “strategy with the benefit of this is that the rapid decrease in the price of bitcoin will lead to bankruptcy. Yahoo said financing Earlier this month.

In fact, the Gamestop Declaration on Bitcoin’s Investment in May sent 10 % shares in one day.

Gamestop’s revenues have decreased every year since 2023, when video players choose digital games instead of visiting their stores. On Tuesday, the company reported that the revenues of the first quarter decreased by 6 % from the previous year to 748 million dollars, which led to a 5 % decrease in the arrow the next day.

Laura Praton is a reporter for Yahoo’s funding. Follow it on Bluesky @laurabratton.bsky.social. Email it on laura.bratton@yahoink.com.

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