GameStop’s Stock Plunges Amid Bitcoin Investment Plans
GameStop’s stock took a hit, dropping over 25% on Thursday. The dip came after the company revealed plans to issue $1.3 billion in convertible bonds. The funds will support the acquisition of Bitcoin (BTC), as part of a new strategy.
The company will sell these 0% convertible senior notes,due in 2030,in a private transaction.The move is part of a broader shift in the company’s strategy. The proceeds will fund various corporate needs, notably Bitcoin purchases. This decision follows the board’s recent approval of a new investment policy.
GameStop aims to buy Bitcoin with the bond sale proceeds. This aligns with a growing trend among firms adopting digital assets. The retailer hopes to diversify its assets with BTC. Yet, the market reacted negatively. Shares soared 14% in after-hours trading but fell sharply during regular hours.
GameStop’s move mirrors others like MicroStrategy, which already holds Bitcoin in its treasury. The plan sparked mixed reactions. Some see it as a bold step,while others are skeptical. The stock opened at $25.78 per share, but it plummeted to $21.16.
Investors are divided. Some praise GameStop’s forward-thinking approach, while others worry about its core business. Analyst Bret Kenwell from eToro expressed doubts.He questioned how Bitcoin fits into gamestop’s overall strategy.
The company also plans to shutter more stores this year, adding to concerns about its retail future. This strategic shift has left many questioning gamestop’s long-term plans and viability.
