A GameStop outlet is pictured in Union Square, New York City, on April 4, 2025.
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GameStop stock prices dropped on Thursday following the announcement of a $1.75 billion offering of convertible notes aimed at financing its new strategy for purchasing bitcoin.
The retailer stated that it plans to use the funds from this offering for general corporate needs, “which may include investments aligned with GameStop’s Investment Policy and potential acquisitions.”
As part of this investment approach, GameStop plans to include cryptocurrencies in its financial holdings. Last month, it acquired 4,710 bitcoins valued at over half a billion dollars.
After the news broke, the stock fell by over 15% in premarket trading.
GameStop
GameStop is adopting a similar approach to software company MicroStrategy, now rebranded as Strategy, which has invested billions in bitcoin across the years, becoming the largest corporate owner of the cryptocurrency. This strategy has led to a rapid but unstable increase in Strategy’s stock price.
Strategy has used various securities, including convertible debt, to finance its bitcoin buying spree.
CEO Ryan Cohen stated that GameStop’s move to acquire bitcoin is motivated by broader economic factors, as the digital currency’s limited supply and decentralized nature may offer some safety against particular risks.
The physical retailer reported a decrease in revenue for the first fiscal quarter on Tuesday, as online gaming surged. Revenue dropped by 17% year on year, totaling $732.4 million.
Following these results, shares fell by 5% on Wednesday. Wall Street seems skeptical that GameStop can replicate MicroStrategy’s success.
Wedbush analyst Michael Pachter reiterated a negative outlook on GameStop, noting that the meme stock has relied on “greater fools” willing to purchase shares at more than twice their asset value. He expressed doubts about the bitcoin investment strategy, arguing that with its current valuation at 2.4 times its cash value, converting more cash to cryptocurrency is unlikely to generate a higher premium.
Correction: GameStop shares dropped by 5% on Wednesday. An earlier report misrepresented the percentage.
