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GameStop Shares Plummet Amid Bitcoin Pivot Concerns

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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.

GameStop Doubles Down on Bitcoin as a Treasury Reserve Asset and Plans More Store Closures

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GameStop (GME.N) announced on Tuesday that its board has approved the addition of bitcoin as a treasury reserve asset, a move that mirrors the strategy of corporate bitcoin giant MicroStrategy (MSTR.O). The decision highlights GameStop’s shift toward embracing cryptocurrency as a core component of its business operations.

GameStop’s Strategic Shift Toward Bitcoin

The move to add bitcoin to its treasury comes shortly after a similar rebranding by MicroStrategy, which removed “Micro” from its name in February to emphasize its focus on the cryptocurrency. MicroStrategy, known for being the largest corporate holder of bitcoin, has integrated the cryptocurrency into the heart of its operations.

GameStop has stated that it will use a portion of its cash, future debt, or equity issuances to invest in bitcoin, though it did not specify the maximum amount it plans to acquire. This strategic shift follows a broader push to diversify the company’s financial strategies in the face of continued challenges in its core retail business.

Performance and Challenges in Retail Business

Despite the addition of bitcoin to its reserves, GameStop continues to face difficulties in its primary business of retailing videogame hardware and merchandise. The company reported a significant rise in fourth-quarter profit, which more than doubled to $131.3 million from $63.1 million the previous year, largely due to cost-cutting efforts. GameStop also posted quarterly revenue of $1.28 billion, down from $1.79 billion in the same period last year.

The company, which became a focal point during the “meme stock” trading craze, has struggled with the shift toward digital downloads, game streaming, and e-commerce, contributing to a decline in physical retail sales.

Future Outlook and Store Closures

In response to these challenges, GameStop has aggressively reduced its retail footprint, closing 590 stores in the U.S. in fiscal 2024. The company expects to close a “significant number” of additional stores in fiscal 2025 as part of its ongoing efforts to streamline operations and adapt to the changing gaming landscape.

Broader Cryptocurrency Adoption and Strategic Moves

GameStop’s decision to invest in bitcoin aligns with broader trends of increasing institutional adoption of cryptocurrencies. This move follows U.S. President Donald Trump’s recent executive order to establish a strategic reserve of cryptocurrencies, further reflecting growing interest in digital assets.

Unity Software Shares Surge After Cryptic Post by ‘Roaring Kitty’

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Unity Software’s shares surged nearly 10% on Thursday following a cryptic social media post by Keith Gill, famously known as “Roaring Kitty,” on platform X. The post reignited enthusiasm for the video game software maker, marking a strong start to 2025 after a tumultuous year.

Gill, who rose to prominence during the 2021 meme stock frenzy that fueled GameStop’s dramatic rally, shared a clip referencing late musician Rick James, who featured in a song titled “Unity.” The subtle nod sparked renewed investor interest in Unity’s stock.

If gains hold, Unity could add over $700 million to its market valuation. Shares climbed to a high of $26 on the first trading day of 2025.

Meme Stock Influence

Art Hogan, chief market strategist at B. Riley Wealth, highlighted the impact of meme stock culture, stating, “The leader of the meme stock post on social media, whether it’s Reddit or X, you’re certainly going to see that reaction by that small army of meme stock players — that’s what we’re seeing again today.”

Challenges and Recovery

Unity Software faced a challenging 2024, with its stock plummeting 45% amid backlash over its controversial “runtime fee” pricing policy introduced in 2023. The policy, which sparked outrage among video game developers, was scrapped in 2024.

The company also underwent significant restructuring, cutting 25% of its workforce in 2024 after an 8% reduction in 2023, as it shifted focus toward profitability. Despite these challenges, Unity remains a critical player in the gaming industry, with its software toolkit powering popular titles like Pokemon Go, Beat Saber, and Hearthstone.

Gill’s Influence and Meme Stock Trends

Keith Gill’s influence on stock movements continues to captivate meme stock enthusiasts. However, his past moves have had mixed results. For instance, Gill’s June 2024 livestream failed to generate excitement for GameStop, causing its stock to tumble. Similarly, his dissolved stake in pet retailer Chewy last year had minimal impact on the market.

Thomas Hayes, chairman at Great Hill Capital LLC, expressed skepticism over the sustainability of meme stock trends. “You would think people would have learned by now that playing these silly reindeer games end in tears… it’s not the way to invest,” Hayes remarked.

Unity’s latest rally underscores the persistent influence of social media and meme culture on the stock market, even as traditional investors urge caution.