Traders hate that GameStop is raising money to buy bitcoin
When I heard rumors about GameStop mulling the idea of holding bitcoin on its balance sheet — a change officially announced on Tuesday — my first thought was: well, given how much of the company’s net income has been driven by interest generated by its holdings of Treasury bills, switching to a much more volatile asset could cause some huge fluctuations in its bottom line.
Instead, it seems GameStop has decided on the barbell investment strategy. In more colloquial terms, it’s the “why not both?” approach. And to do so, they’re using the Saylor method.
GameStop announced a $1.3 billion private offering of convertible senior notes, which will be used “for general corporate purposes, including the acquisition of Bitcoin in a manner consistent with GameStop’s Investment Policy.”
The notes, which are due in 2030, give buyers the option to convert their holdings into shares at $28.46 or cash, and carry a juicy yield of 0.00%. The offering can be upsized by up to $200 million.
The stock was up nearly 12% on the day, but at its lows in the after-hours session, the stock had erased those gains. Shares have since pared some of that decline.
