- GameStop’s (GME) stock crashed over 23% to $21.77 on Thursday midday after announcing a $1.3 billion bond sale to buy Bitcoin (BTC), raising doubts about its struggling retail business and the timing of this pivot.
- The company’s plan to hold Bitcoin as a reserve asset, alongside closing many stores, follows a 27% Bitcoin price rise since November, but experts question why it didn’t act six or nine months earlier.
- Despite initial excitement from meme stock fans, the move hasn’t boosted crypto market confidence, and with a nearly 30% yearly drop, investors remain wary of GameStop’s core strategy.
GameStop (GME), the video game store chain, saw its stock tumble over 23% to $21.77 by Thursday midday, wiping out all the excitement from the day before when it spiked on news of a bold new plan. The company revealed it’s issuing $1.3 billion in special bonds that don’t pay interest and won’t mature until 2030, all to buy Bitcoin (BTC) and stash it as a backup asset, much like some big companies do with cash. This move sparked a frenzy among small-time traders who love this “meme stock” for its wild swings, but the thrill didn’t last long as doubts crept in about whether this Bitcoin bet can really save a retail business that’s been struggling to stay afloat.
The timing of this shift is raising eyebrows. Bitcoin’s price has jumped nearly 27% since the presidential election in November, but it’s still way off its all-time highs, and the crypto market’s future looks shaky with the economy in flux. Bret Kenwell, an investment expert at eToro, told Reuters he wonders why GameStop didn’t jump on this idea sooner – say, six or nine months ago – when Bitcoin was cheaper and the move might have packed more punch. Instead, they are diving in now, copying a strategy from Michael Saylor‘s Strategy (MSTR), a big Bitcoin holder that’s treated like a stand-in for the cryptocurrency itself. But with GameStop also planning to shut down a “significant number” of stores this year, it’s clear the brick-and-mortar side of things isn’t getting any healthier, leaving investors skeptical about what’s next.
Confidence isn’t exactly soaring. Agne Linge from WeFi, a decentralized bank, notes that GameStop’s big Bitcoin announcement hasn’t done much to lift the broader crypto market’s spirits, and the stock’s 29% drop this year shows the mood on Wall Street isn’t much better. Kenwell adds that people aren’t sold on GameStop’s core business anymore, and this pivot to Bitcoin feels more like a Hail Mary than a solid fix. With shares below the $22 level and the biggest one-day fall since last June looming, the company’s gamble is under a harsh spotlight. Is Bitcoin the lifeline GameStop needs, or just a flashy distraction from a retail model that’s running out of lives? For now, the market’s betting on the latter, and the numbers—$1.3 billion in bonds, 27% Bitcoin gains since November, 29% yearly loss—tell a story of high stakes and higher uncertainty.
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