{"id":12475,"date":"2025-03-27T12:47:59","date_gmt":"2025-03-27T12:47:59","guid":{"rendered":"https:\/\/finderica.com\/?p=12475"},"modified":"2025-03-27T12:47:59","modified_gmt":"2025-03-27T12:47:59","slug":"gamestop-shares-drop-on-planned-debt-issue-to-buy-bitcoin","status":"publish","type":"post","link":"https:\/\/finderica.com\/?p=12475","title":{"rendered":"GameStop shares drop on planned debt issue to buy bitcoin"},"content":{"rendered":"<div id=\"RegularArticle-ArticleBody-5\" data-module=\"ArticleBody\" data-test=\"articleBody-2\" data-analytics=\"RegularArticle-articleBody-5-2\"><span class=\"HighlightShare-hidden\" style=\"top:0;left:0\"><\/span><\/p>\n<div class=\"InlineImage-imageEmbed\" id=\"ArticleBody-InlineImage-107427912\" data-test=\"InlineImage\">\n<div class=\"InlineImage-wrapper\">\n<div>\n<p>Traders work at the post where GameStop is traded on the floor at the New York Stock Exchange on June 12, 2024.<\/p>\n<p>Brendan McDermid | Reuters<\/p>\n<\/div>\n<\/div>\n<\/div>\n<div class=\"group\">\n<p><span class=\"QuoteInBody-quoteNameContainer\" data-test=\"QuoteInBody\" id=\"RegularArticle-QuoteInBody-1\">GameStop<span class=\"QuoteInBody-inlineButton\"><span class=\"AddToWatchlistButton-watchlistContainer\" id=\"-WatchlistDropdown\" data-analytics-id=\"-WatchlistDropdown\"><button class=\"AddToWatchlistButton-watchlistButton\" aria-label=\"Add To Watchlist\" data-testid=\"dropdown-btn\"><span class=\"AddToWatchlistButton-addWatchListFromTag\"><\/span><\/button><\/span><\/span><\/span> shares are set to give back much of Wednesday&#8217;s rally after the video game retailer announced plans to raise debt to buy bitcoin.<\/p>\n<p>The meme stock tumbled more than 7% in premarket trading Thursday, following an almost 12% rally the previous session. The reversal came after the video game chain announced plans to raise $1.3 billion through the sale of convertible senior notes due in 2030 to buy bitcoin.<\/p>\n<\/div>\n<div class=\"group\">\n<p>On Tuesday, the GameStop board unanimously approved a plan to buy cryptocurrencies using corporate cash or future debt and equity proceeds, echoing a move made famous by\u00a0MicroStrategy.<\/p>\n<p>Under the latest sale, a round of convertible debt will require issuing 46 million additional shares of GameStop, bringing the company&#8217;s cash to $6.1 billion, up from about $4.8 billion, according to Wedbush analyst Michael Pachter.<\/p>\n<p>&#8220;We suspect that GameStop&#8217;s share price will drift lower prior to the issuance of the convert, particularly given that a convert investor will receive a zero coupon and will be required to have faith that the GameStop meme phenomenon will persist for another five years,&#8221; Pachter, who has an underperform rating on GameStop, said in a note to clients.<\/p>\n<p>The analyst is doubtful that GameStop&#8217;s foray into bitcoin following MicroStrategy&#8217;s playbook will be as successful because of the stock&#8217;s already-high valuation.<\/p>\n<p>GameStop is currently valued at $12.7 billion, more than twice the cash balance after the convertible is issued. By contrast, MicroStrategy trades at less than two times the value of its bitcoin holdings.<\/p>\n<p>&#8220;With GameStop already trading at more than 2x its cash holdings it is unlikely that its conversion of cash into Bitcoin will drive an even greater premium,&#8221; Pachter said.<\/p>\n<p><em><strong>Get Your Ticket to Pro LIVE <\/strong><\/em><br \/><em>Join us at the New York Stock Exchange!<\/em><\/p>\n<p><em>Uncertain markets? Gain an edge with\u00a0<\/em><a href=\"https:\/\/www.cnbcevents.com\/pro-live-2025\/?utm_source=DotCom&amp;amp;utm_medium=ProArticle&amp;amp;utm_campaign=ProLive\" target=\"_blank\" rel=\"noopener\"><em>CNBC Pro LIVE<\/em><\/a><em>, an exclusive, inaugural event at the historic New York Stock Exchange. <\/em><\/p>\n<p><em>In today&#8217;s dynamic financial landscape, access to expert insights is paramount. As a CNBC Pro subscriber,\u00a0<\/em><a href=\"https:\/\/www.cnbcevents.com\/pro-live-2025\/?utm_source=DotCom&amp;amp;utm_medium=ProArticle&amp;amp;utm_campaign=ProLive\" target=\"_blank\" rel=\"noopener\"><em>we invite you<\/em><\/a><em>\u00a0to join us for our\u00a0<strong>first exclusive, in-person CNBC Pro LIVE event at the iconic NYSE on Thursday, June 12.<\/strong><\/em><\/p>\n<p><em>Join interactive Pro clinics led by our Pros\u00a0<strong>Carter Worth, Dan Niles <\/strong>and\u00a0<strong>Dan Ives,<\/strong>\u00a0with a special edition of Pro Talks with\u00a0<strong>Tom Lee.\u00a0<\/strong>You&#8217;ll also get the opportunity to network with CNBC experts, talent and other Pro subscribers during an exciting cocktail hour on the legendary trading floor.\u00a0<strong>Tickets are limited!<\/strong><\/em>\u00a0<\/p>\n<\/div>\n<div class=\"group\">\n<div class=\"RelatedContent-relatedContent\" id=\"RegularArticle-RelatedContent-1\">\n<div class=\"RelatedContent-container\">\n<div class=\"RelatedContent-nonCollapsibleContent\">\n<h2 class=\"RelatedContent-header\">Don\u2019t miss these insights from CNBC PRO<\/h2>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<p><a href=\"https:\/\/www.cnbc.com\/2025\/03\/27\/gamestop-shares-drop-on-planned-debt-issue-to-buy-bitcoin.html\" target=\"_blank\" rel=\"noopener\">Source link <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Traders work at the post where GameStop is traded on the floor at the New York Stock Exchange on June 12, 2024. Brendan McDermid | Reuters GameStop shares are set to give back much of Wednesday&#8217;s rally after the video game retailer announced plans to raise debt to buy bitcoin. The meme stock tumbled more<\/p>\n","protected":false},"author":1,"featured_media":12476,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"rank_math_lock_modified_date":false,"footnotes":""},"categories":[196],"tags":[1381,23,367,891,4087,3301,4486,132],"class_list":{"0":"post-12475","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-finance-news","8":"tag-bitcoin","9":"tag-buy","10":"tag-debt","11":"tag-drop","12":"tag-gamestop","13":"tag-issue","14":"tag-planned","15":"tag-shares"},"_links":{"self":[{"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/posts\/12475","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=12475"}],"version-history":[{"count":0,"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/posts\/12475\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/media\/12476"}],"wp:attachment":[{"href":"https:\/\/finderica.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=12475"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=12475"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=12475"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}