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4w ago

GameStop's Stock Plummets 23% Following Bitcoin Investment Plan

The retailer's $1.3 billion convertible bond offering to fund Bitcoin purchases sparks investor skepticism as store closures continue.

A screen displays GameStop stock trading information on the floor at the New York Stock Exchange (NYSE) in New York City, U.S., June 3, 2024. REUTERS/Brendan McDermid/File Photo
Gamestop shares fell double digits after announcing $1.3 billion Bitcoin purchases.
FILE - The sign hangs above the doorway into a GameStop store, June 11, 2024, in Lone Tree, Colo. (AP Photo/David Zalubowski, file)
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Overview

  • GameStop announced plans to issue $1.3 billion in convertible bonds to fund Bitcoin purchases, marking a major shift in strategy.
  • The company's stock fell over 23% on Thursday, erasing earlier gains and hitting its lowest price since October 2024.
  • Investors and analysts have raised concerns about the timing, viability, and effectiveness of GameStop's Bitcoin pivot, especially given the cryptocurrency's recent volatility.
  • GameStop also confirmed the closure of over 1,000 retail stores globally, reducing its footprint by more than 30% as it struggles with declining sales.
  • The move mirrors Strategy's Bitcoin-focused playbook but faces criticism due to differences in valuation and market conditions, leading to doubts about its long-term impact.