GameStop Stock Is Tumbling After Hours: Here's Why

GameStop Corp GME shares are falling in Wednesday’s after-hours session after the company announced a proposed private offering.

What Happened: After the market close, GameStop announced plans to offer $1.75 billion of 0.00% Convertible Senior Notes due 2032 to institutional buyers. The company expects to grant the initial purchasers a 13-day option to purchase up to an additional $250 million of the notes.

GameStop intends to use the net proceeds from the offering to make investments consistent with the company’s investment policy, as well as for potential acquisitions.

The offering comes a day after GameStop reported first-quarter results with revenue of $732.4 million coming in below analyst estimates of $754.24 million, and adjusted earnings per share totaling 17 cents, above estimates of four cents.

GameStop ended the period with approximately $6.4 billion in cash, cash equivalents and marketable securities, but said it used cash to purchase 4,710 Bitcoin subsequent to quarter’s end.

GME Price Action: GameStop shares were down 10.02% in after-hours, trading at $25.69 at the time of publication on Wednesday, according to Benzinga Pro. GameStop shares are down about 8% year-to-date.

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Image: Jillian Cain Photography/Shutterstock.