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GameStop Faces Investor Backlash Over $1.3 Billion Bitcoin Strategy

The gaming retailer's stock has plunged over 23% following its plan to finance Bitcoin purchases through convertible bonds, raising doubts about its business model and timing.

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 a $1.3 billion convertible bond offering to fund Bitcoin purchases, with bonds maturing in 2030 and a conversion price set at $29.85 per share.
  • The company's stock initially surged 11.7% after the announcement but has since plummeted over 23%, erasing earlier gains as skepticism mounts.
  • Analysts have criticized the move as high-risk, questioning its timing and ability to address GameStop's core challenges, including declining retail sales and store closures.
  • GameStop plans to close over 1,000 stores globally in 2025, further reducing its physical retail footprint as it struggles to adapt to digital gaming trends.
  • Despite the Bitcoin pivot, investor confidence remains low, with concerns about the company's valuation and the long-term viability of its strategy.