GameStop's (GME) proposed private offering of convertible notes will likely "fall flat," given that an investor would receive a zero coupon, Wedbush said in a Thursday note.

The company on Wednesday announced a private offering of $1.3 billion in 0.00% convertible senior notes due 2030 to qualified institutional buyers, with net proceeds to be used for general corporate purposes, including the acquisition of bitcoins.

Investors buying the bonds will be paying a "large" premium to the company's assets, Wedbush analysts said. With GameStop trading at over two times its cash holdings, it is unlikely that its conversion of cash into Bitcoin will drive an even greater premium, they said.

The analysts said they were uncertain whether there will be much offtake on the offering, as a large portion of the company's investor base would likely be unable to qualify under the "qualified" investor requirement.

Yet despite "a complete lack of articulated strategy," GameStop has consistently found new investors, the analysts said.

Wedbush maintained an underperform rating on the stock and said it would revisit its $11.50 price target once the company completes the offering.

Shares were down more than 13% in recent trading.

Price: 24.64, Change: -3.73, Percent Change: -13.13