Key Takeaways
- GameStop shares are dropping 17% in premarket trading Thursday, extending a post-earnings slide.
- After the bell Wednesday, the video-game retailer announced a $1.75 billion convertible note offering. Shares fell more than 5% yesterday after GameStop reported a 17% year-over-year decline in first-quarter sales.
- The retailer said last month that it had bought over 4,700 bitcoin.
GameStop (GME) shares are dropping 17% in premarket trading Thursday, a day after the video-game retailer announced a new fundraising effort.
The company late yesterday said it was planning to offer $1.75 billion in convertible notes, with another $250 million open to those who buy in first. The announcement came a day after GameStop reported a 17% year-over-year decline in first-quarter sales, which caused shares to fall more than 5% in Wednesday trading.
The new convertible note offering aligns with the retailer’s previously stated plans to raise new money to allow it to buy bitcoin, after adding the cryptocurrency to its corporate investment policy in March.
Last month, GameStop disclosed that it had purchased 4,710 bitcoin, worth slightly more than $500 million at the cryptocurrency’s current price of roughly $107,000. GameStop said it plans to use the new funds for “general corporate purposes, including making investments in a manner consistent with GameStop’s Investment Policy and potential acquisitions.”
GameStop shares entered Thursday down about 9% since the start of the year.
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