GameStop shares jump nearly 12% after the company announced plans to purchase Bitcoin (BTC)

GameStop shares jumped nearly 12% on March 26 after the company announced plans to purchase Bitcoin (BTC). The company plans to finance the purchase through debt financing.

GameStop shares (NYSE:GMS) soared nearly 12% on Friday after the company announced plans to purchase Bitcoin (BTC) and disclosed a $1.3 billion convertible notes offering.

After markets closed, GameStop announced a offering of 12,500,000 senior notes due 2028 convertible into common stock, with a total offering price of $1,300,000,000.

The convertible senior notes will be used for general corporate purposes, including the acquisition of Bitcoin, according to a company statement.

“GameStop expects to use the net proceeds from the offering for general corporate purposes, including the acquisition of Bitcoin in a manner consistent with GameStop’s Investment Policy,” it said.

On Thursday, GameStop revealed plans to use a portion of its corporate cash or future debt to buy digital assets, including Bitcoin and U.S.-dollar-pegged stablecoins. GameStop’s cash reserves stood at $4.77 billion on February 1 compared to $921.7 million one year earlier.

According to Google Finance, GameStop shares closed at $28.36 on the NYSE, marking an 11.65% gain for the day.

GameStop stock performance on March 26. Source: Google Finance

The company reported a net income of $131.3 million for Q4 2024 compared to $63.1 million for the prior year Q4. Although net sales had fallen $511 million year-over-year, the company has been aggressively cutting expenses, including closing 590 stores throughout the United States in 2024.

GameStop was once at the center of the 2021 meme stock craze when retail traders orchestrated a “short squeeze” that sent the price of the stock soaring. Some hedge funds closed down as a result of losses sustained during the short squeeze, giving the GameStop meme stock rise a “David vs. Goliath” narrative.

Also read: GameStop buying Bitcoin would ‘bake the noodles’ of TradFi: Swan exec

More companies adopt Bitcoin reserve strategy

GameStop is following the lead of Microstrategy (NASDAQ:MSTR), which first added Bitcoin to its treasury in August 2020. As of December 2024, Microstrategy’s stock had gained 3200% since adopting its crypto strategy.

Metaplanet, a Japanese company with plans to buy 21,000 BTC by 2026, saw its stock price rise 4800% since announcing the move. In promotional materials, Metaplanet said it had attracted a significant number of new investors, with its market capitalization rising by 6300%.

Semler Scientific (NYSE:SCEL) also saw a spike in its share price after announcing plans to purchase Bitcoin. According to CoinGecko, 32 publicly traded companies hold BTC on their balance sheets.