Updates

** GameStop's GME.N shares tumble 15.5% to $23.95, and on track for their biggest daily pct drop since Jun 2024, as co seeks capital raise to purchase bitcoin BTC=

** Video game retailer late Weds announced it's offering privately $1.3 bln 0% 5-yr convertible bonds (CBs)

** GME shares finished up nearly 12% on Weds after co said it would add the cryptocurrency as a treasury reserve asset

** GameStop's pivot echoes that of Strategy MSTR.O, which has tapped the capital markets extensively to hoard bitcoin

** The CB financing suggests GME "may be ready to employ a more aggressive BTC acquisition approach, influenced by Strategy," said Stéphane Ouellette, CEO at crypto derivatives provider FRNT Financial FRNT.V

** "Having said that, what remains to be seen is how far the firm will go in its BTC accumulation and how much capital and debt it is ready to deploy," he said

** As of Feb 3, GameStop had $4.8 bln in cash, most of which was collected from ATM ("at-the-market") sales of equity

** Co had ~$12.7 bln market cap through Weds, per LSEG data

** The reference price used to determine the conversion premium of the CBs to be based on the stock's VWAP (volume weighted avg price) from 1:00 p.m. through 4:00 p.m ET on Thurs

** With the move on the session, stock down ~24% YTD. It closed at $13.17 a year ago

(Reporting by Lance Tupper in New York and Medha Singh in BengaluruLance Tupper is a Reuters market analyst. The views expressed are his own)

((lance.tupper@tr.com 1-646-279-6380))