GameStop's stock experienced a significant downturn, plummeting 12% in after-hours trading on Wednesday, June 11, 2025, following the announcement of a proposed $1.75 billion private offering of convertible senior notes. This decline added to an already challenging day for the company, as its shares had earlier fallen by 5.34% during regular trading hours, closing at $28.55, after the announcement of a 17% drop in first-quarter revenue.

The proposed debt offering involves convertible senior notes due on June 15, 2032, carrying a 0% interest rate. GameStop intends to offer these notes to qualified institutional buyers in a private placement. Additionally, initial purchasers will have the option to purchase an additional $250 million in notes within a 13-day period after the issuance. The notes are convertible into cash, shares of GameStop's Class A common stock, or a combination of both, at the company's discretion. The specific conversion rate and other terms will be determined at the time of pricing.

GameStop has stated that the proceeds from the offering will be used for general corporate purposes, including investments aligned with its investment policy and potential acquisitions. While the company did not explicitly state that the funds would be used for further Bitcoin purchases, it mentioned making investments in line with its investment policy. This announcement has fueled speculation, especially considering GameStop's recent activity in the cryptocurrency market.

The company recently invested $513 million in Bitcoin, acquiring 4,710 BTC on May 28. This move has positioned GameStop as the 13th largest corporate holder of Bitcoin, according to BitcoinTreasuries.NET data. The use of convertible senior notes to raise capital for Bitcoin investments has become an increasingly common strategy among public companies seeking to expand their cryptocurrency holdings.

The structure of the convertible senior notes is noteworthy. As general unsecured obligations, they will not accrue regular interest, and the principal amount will not increase over time. This feature may be attractive to investors who anticipate significant growth in GameStop's stock price, as the conversion feature offers the potential for substantial returns.

The recent financial results reported by GameStop revealed a 17% decrease in first-quarter revenue, adding pressure to the company's stock. The combination of disappointing revenue figures and the announcement of the $1.75 billion debt offering has created uncertainty among investors, leading to the stock's sharp decline.

Looking ahead, GameStop's strategy of diversifying its assets into Bitcoin and exploring potential acquisitions signals a broader effort to transform its business model. The company, traditionally a video game retailer, is seeking to adapt to the evolving landscape of the gaming industry and capitalize on new opportunities in the digital asset space. The success of this transformation will depend on GameStop's ability to effectively deploy the capital raised through the convertible notes offering and execute its strategic vision.