GameStop's stock price remained flat after announcing a $450 million refinancing through a private convertible note issuance for investments (potentially including Bitcoin).
The retailer disclosed to the U.S. Securities and Exchange Commission (SEC) on Monday that someone opted to purchase an additional $450 million in the initial $2.25 billion note issuance.
These funds have been designated for general corporate purposes, including investments and potential acquisitions. Although Bitcoin (BTC) was not specifically mentioned, the retailer has previously stated plans to increase its reserves.
At the current price, Bitcoin is trading at approximately $108,000, and if GameStop were to use the entire $450 million to purchase Bitcoin, its existing reserve of 4,710 Bitcoins could nearly double.
According to Google Finance data, during the trading session following the filing on Monday, GameStop's stock (GME) fell from an opening price of $23.03 to a low of $22.45, a decline of 2.5%.
The stock price slightly rebounded, closing at $23.55 on Wednesday, up more than 1.8% over the past five days; however, it also dropped 0.38% in after-hours trading.
The stock price trend is similar to May when GameStop announced a $500 million Bitcoin purchase, but the stock price failed to rise and instead fell by about 11%.
Meanwhile, other companies, such as the Japanese investment firm Metaplanet, saw their stock prices soar by up to 22% after announcing Bitcoin purchase plans.
The stock price of Indonesian fintech company DigiAsia Corp also surged by 91% after buying Bitcoin, and the Paris-based crypto company Blockchain Group saw its stock price skyrocket by 225% after purchasing Bitcoin in March.
Vincent Liu, Chief Investment Officer of Kronos Research, stated in an interview with Cointelegraph that while many companies are adopting Bitcoin to diversify reserve risks and gain new liquidity amid high national dollar debt levels, simply buying Bitcoin is not enough.
The launch of Bitcoin reserves requires "a well-crafted strategy to protect capital and enhance liquidity," as "without clear execution and a long-term vision, it is difficult to bring sustained value," Liu said.
"It’s not just about buying Bitcoin; the key is how and why to buy it. A clear strategy and strong execution can build trust and attract liquidity, but if it’s just hype or a 'sell the news' event like GameStop, the impact will be very limited."
GameStop had previously ventured into the crypto space by launching a crypto wallet for users, but the wallet was ultimately shut down in November 2023 due to regulatory uncertainty.
They also launched an NFT marketplace, but that marketplace was also closed in January 2024 due to similar regulatory uncertainty issues.
GameStop is also considered the first case of meme stock success in 2021, when a short squeeze caused the stock price to soar over 1,000% within a month, reversing the situation where traders profited from shorting the company.
Related: Unhedged spot ETF inflows show that Bitcoin (BTC) has become a macro asset
Original: “GameStop Fails to Attract Traders with $450 Million Financing Potentially for Bitcoin (BTC)”
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