Popular Approaches Adopted by Strategy and GameStop: Using Preferred Stock and a $1.75 Billion Convertible Bond to Finance BTC Purchases

Strategy’s STRD Preferred Stock Hits Nasdaq with Bitcoin Backing

On June 11, 2025, Strategy launched its third Bitcoin-backed preferred stock, STRD, on Nasdaq, marking another milestone in its innovative approach to blending cryptocurrency with traditional finance.

The STRD offering, priced at $85 per share on June 5, raised approximately $979.7 million in net proceeds through the issuance of 11,764,700 shares. STRD offers a 10% non-cumulative quarterly dividend, payable only when declared by the board, and is not convertible into common stock, positioning it as a high-yield option for investors seeking Bitcoin exposure without direct crypto ownership.

STRD follows Strategy’s earlier preferred stock offerings, STRF (10% dividend, senior priority) and STRK (8% dividend, convertible), but carries a higher risk and yield due to its lower priority in the capital structure.

The proceeds from STRD will be used for general corporate purposes, primarily to acquire additional Bitcoin, reinforcing Strategy’s position as a leader in corporate Bitcoin adoption. The stock opened at $85 on June 11 and rose as high as $93.42 on its debut day.

GameStop’s $1.75 Billion Convertible Bond Offering Signals Bitcoin Ambitions

On June 12, 2025, GameStop, a U.S.-based retailer known for its video game and electronics stores, announced a $1.75 billion convertible bond offering, with proceeds earmarked for general corporate purposes, including investments aligned with its updated policy allowing Bitcoin as a reserve asset.

The zero-interest notes, set to mature in 2032, include an option for initial investors to purchase an additional $250 million within 13 days, with proceeds intended for general corporate purposes, including potential Bitcoin acquisitions.

Once a traditional retail chain, GameStop has pivoted toward digital transformation and blockchain technologies, leveraging its cult following among retail investors to explore innovative financial strategies.

This move aligns with GameStop’s broader vision to diversify its asset base and strengthen its balance sheet amid a volatile retail landscape, building on its recent purchase of 4,710 BTC worth $513 million on May 28, 2025.

However, the announcement triggered a sharp market reaction, with GME having already slid 5.34% to $28.55 during normal trading hours on Wednesday, after GameStop reported a first-quarter revenue fall of 17% in after-hours the day before.

Shared Strategies and Broader Implications

The simultaneous moves by Strategy and GameStop highlight a growing trend among corporations to integrate Bitcoin into their capital structures, using innovative financial instruments like preferred stocks and convertible bonds. Both companies employ debt or equity financing to fund Bitcoin acquisitions.

GameStop’s convertible bond offering echoes Strategy’s approach, leveraging low-cost debt to build a Bitcoin treasury while maintaining flexibility for other corporate needs.

This convergence signifies a broader acceptance of Bitcoin as a corporate reserve asset, bridging traditional finance and cryptocurrency markets. It offers investors new avenues to gain Bitcoin exposure through regulated securities, potentially attracting institutional capital.

Market reactions to the Bitcoin-backed strategies of Strategy and GameStop remain mixed. While Strategy’s STRD preferred stock surged 5.7%, but some analysts caution that its high-leverage approach, reliant on a $41 billion Bitcoin reserve, could face significant risks in a Bitcoin bear market. Like, GameStop triggered a 5.34% drop in its stock price.

As more companies explore similar approaches to integrate Bitcoin into their capital structures, this strategy remains in its exploratory phase, with its long-term viability and impact on capital markets yet to be fully realized.