GameStop shares plummet due to Bitcoin strategy
GameStop stock crashes 19% after $1.75B Bitcoin-linked debt plan
GameStop (NYSE: GME) shares plunged 19% on Thursday after the company announced plans to raise $1.75 billion through a convertible note sale, with a portion earmarked for Bitcoin purchases.
The move, framed as a “strategic hedge” against macroeconomic risks by CEO Ryan Cohen, drew immediate comparisons to MicroStrategy’s Bitcoin-first playbook—but investors weren’t convinced, reports Cryptopolitan.
The drop came on the heels of a 5% loss Wednesday following weak Q1 revenue, and capped a brutal week marked by growing doubts over GameStop’s business fundamentals and financial strategy.
Analysts pan the pivot amid core business erosion
GameStop’s decision to double down on crypto comes as its core retail business deteriorates, with Q1 sales down 17% YoY to $732.4 million. Analyst Michael Pachter of Wedbush lambasted the move, reiterating his “underperform” rating. He argued the stock already trades at an inflated 2.4x cash, and accused the company of targeting “greater fools” with speculative asset conversion. “It won’t work,” Pachter said. The company already holds 4,710 BTC (worth over $500M at acquisition), and the new debt sale could more than double that exposure.
NFT flop and regulatory retreat haunt GameStop’s crypto past
Skepticism is amplified by GameStop’s previous failed crypto foray. Its once-hyped NFT marketplace, launched in 2022, quickly unraveled after content moderation scandals, rights issues, and a full team layoff by year-end. By February 2024, GameStop fully exited the NFT and wallet space, citing “regulatory uncertainty.” Critics argue that the company is now pivoting toward Bitcoin without resolving underlying operational weaknesses, raising fears of another short-lived speculative detour.
Wall Street says “no” to crypto play amid retail decline
While GameStop’s management may view Bitcoin’s fixed supply as a hedge against fiat debasement, investors are unconvinced that leveraging debt to chase volatile assets is a sustainable strategy—especially for a firm with declining foot traffic and no clear digital pivot. The move is seen as a risky gamble that ignores the realities of GameStop’s eroding market position, especially as online gaming continues to eat into physical retail share.
Despite mimicking MicroStrategy’s high-risk, high-reward playbook, GameStop lacks the earnings cushion, software margins, or investor trust to pull off a similar outcome. The market’s verdict was swift and unforgiving—a 19% drop that wiped out hundreds of millions in market cap, reinforcing the view that speculation isn’t a substitute for strategy.
Recently we wrote that GameStop has officially entered the Bitcoin market, announcing its first BTC acquisition worth $513 million.
