GameStop (GME) is moving forward with a private offering of $1.3 billion in convertible senior notes, the proceeds of which it plans to use to buy Bitcoin (BTC).
Shares of the videogame retailer and notorious meme stock fell 6% in extended trading after ending the day up 12% as investors digest its cryptocurrency plans and equity raise. The company said in releasing its latest financial results that its board of directors approved the acquisition of BTC.
For its quarter ended Feb. 1, GameStop reported net sales of $1.28 billion, down 28% from a year earlier and below the $1.48 billion analysts had expected from the company. However, its earnings per share (EPS) of $0.29 beat the $0.08 expected on Wall Street.
GameStop currently operates 3,203 stores in the U.S., Canada, Australia, New Zealand, and France.
Strategy’s Playbook
The plan to buy Bitcoin, which has been approved by GameStop’s board of directors, takes a page from the playbook of Strategy (MSTR), which is the world’s largest corporate holder of the cryptocurrency. GameStop’s push into crypto is the latest effort by the company to revive the struggling brick-and-mortar business.
In recent years, GameStop has cut costs and streamlined its operations to shore-up the business. The company’s brick-and-mortar retail business has been pressured by a move to buy video games online and digital downloads.
Bitcoin, the world’s largest cryptocurrency, has been on a roller coaster ride. After hitting an all-time high of $109,000 in January, its price has fallen to $87,000.
Is BTC a Buy?
Only one analyst currently follows GME stock. So instead we’ll look at Bitcoin’s three-month performance. As one can see in the chart below, the price of BTC has declined 6.32% in the last 12 weeks.
