:max_bytes(150000):strip_icc()/GettyImages-2153299024-aad2cb188cc84b11bced9b5417e24229.jpg?w=696&resize=696,0&ssl=1 "GameStop Drops After Announcing Plan to Issue Convertible Bonds for Bitcoin Acquisition")
:max_bytes(150000):strip_icc()/GettyImages-2153299024-aad2cb188cc84b11bced9b5417e24229.jpg?w=1200&resize=1200,0&ssl=1&description=GameStop+Drops+After+Announcing+Plan+to+Issue+Convertible+Bonds+for+Bitcoin+Acquisition){kind=link}
Photo credit: www.investopedia.com
GameStop’s Convertible Bond Plan Sparks Stock Decline
KEY TAKEAWAYS
GameStop (GME) experienced a significant drop in its stock price during intraday trading on Thursday. This decline followed the company’s announcement of a plan to issue $1.3 billion in convertible bonds. The proceeds from this sale are intended for various corporate needs, including potential investments in Bitcoin (BTCUSD).
Earlier this week, GameStop revised its corporate investment strategy to incorporate Bitcoin purchases. The convertible bonds are being offered to investors through a private placement, with a maturity date set for 2030.
Once celebrated as a “meme stock,” GameStop now joins the ranks of other companies employing convertible bonds as a mechanism for increasing Bitcoin holdings. MicroStrategy, which recently rebranded itself from its original name, has effectively utilized similar bond sales to amass a significant Bitcoin reserve.
Convertible bonds are financial instruments that allow bondholders to convert their bonds into a predetermined number of shares of the issuing company. While GameStop’s stock decreased by approximately 15% on Thursday, it has seen an impressive rise of over 80% in value over the past year.
Source
www.investopedia.com