** GameStop's GME.N down 1.7% premarket at $21.36 as Wedbush says investors in last week's convertible bond $(CB)$ offering paying a large premium to video game retailer's assets

** Grapevine, Texas-based firm late Thurs announced pricing $1.3 bln 0% CBs to buy bitcoin BTC=, a shift mimicking that of Strategy MSTR.O

** Wedbush says based on pricing, GME's diluted share count to rise roughly 44 mln shares to ~491 mln shares, valuing them at $10.7 bln

** The conversion price of $29.85 suggests GME will have enterprise value of $14.7 bln vs post-issuance cash balance of ~$6.1 bln

** "We find it hard to understand why any investor would be pay more than 2x cash value for the potential for GameStop to convert that cash into Bitcoin, particularly since the same investors can invest in Bitcoin or a Bitcoin ETF themselves," Wedbush wrote in note

** GME's entry into the trading card business seems to be the only recent business venture to see modest success, Wedbush said, adding that its NFT marketplace strategy has struggled to gain traction

** Wedbush maintains 'underperform' rating, and raises PT by $2 to $13.50 to reflect net cash/sh of $12.50 post CB issuance and $1/sh going concern value

** Through Fri close, GME shares down ~31% YTD. They were trading around $12 a year ago

(Lance Tupper is a Reuters market analyst. The views expressed are his own)

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