The Hurdle Rate Podcast Episode 2 - GME On!
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Apr 2, 2025 GameStop makes waves by diving into the Bitcoin market, revealing strategies to boost its finances. The Trump family's entry into Bitcoin mining adds a fascinating twist, showcasing a new chapter in their business exploits. Discussions on economic impacts, like tariffs and inflation, hint at potential opportunities in cryptocurrency. The evolving relationship between Bitcoin and renewable energy is explored, alongside debates about whether Bitcoin serves as a risk-on or risk-off asset, making the whole discussion lively and thought-provoking.
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GameStop's Bitcoin Leverage Strategy
- GameStop's convertible bond to buy Bitcoin places it at about 31% leverage, aligning with known risk frameworks.
- Starting with convertible debt offers flexibility and aligns with corporate leverage strategy in Bitcoin treasury adoption.
Matt Cole's GameStop Bitcoin View
- Matt Cole advocated that GameStop should shut unprofitable stores and use proceeds to buy Bitcoin.
- He sees convertible bonds as a strong start for GameStop's extensive Bitcoin treasury plans.
Retail Confusion on Convertible Bonds
- Retail investors face confusion reacting to GameStop's convertible bond and dilution.
- Convertible bonds create non-squeezable short interest, complicating retail understanding of the market.