GameStop Faces Investor Backlash After Bitcoin Investment Announcement

The retailer's $1.3 billion Bitcoin plan, funded by convertible bonds, triggers a 23% stock drop and skepticism over its timing and execution.

GameStop announced a $1.3 billion investment in Bitcoin as a treasury reserve asset, funded by 0% interest convertible bonds maturing in 2030.
The company's stock initially rose 11.7% after the announcement but has since fallen 23%, erasing earlier gains as investors question the strategy's viability.
Analysts criticize the timing of the Bitcoin investment, citing market volatility and GameStop's already elevated valuation relative to its cash holdings.
The retailer also confirmed plans to close over 1,000 stores globally, further reducing its physical retail footprint as part of its restructuring efforts.
GameStop's move mirrors MicroStrategy's Bitcoin strategy but has failed to instill confidence in its long-term outlook or significantly impact the broader crypto market.