GameStop (GME.N) shares tumbled more than 15% on Thursday, erasing gains from the previous day, as investors questioned the company’s strategy to pivot toward bitcoin while struggling to revive its core retail business.
The company announced a $1.3 billion offering of 0% 2030 convertible bonds to purchase bitcoin as a treasury reserve asset, a move that initially excited retail investors. However, the enthusiasm quickly faded when GameStop also revealed plans to close a “significant number” of stores, highlighting its continued financial struggles.
Analysts expressed skepticism over the timing of the bitcoin purchase, noting that the cryptocurrency has surged nearly 27% since November’s U.S. presidential election but remains volatile. Some questioned why GameStop waited so long to adopt this strategy.
The company’s approach mirrors that of MicroStrategy (MSTR.O), a major institutional bitcoin holder, but has so far failed to boost investor confidence. Additionally, broader uncertainties in the cryptocurrency market have added to concerns about the sustainability of GameStop’s pivot.
With Thursday’s drop, GameStop shares are down over 23% year-to-date.
