GameStop lost close to $3 billion in market value on March 27 as shareholders reconsidered the videogame retailer’s intentions to accumulate Bitcoin (BTC), based on data from Google Finance.
On March 26, GameStop revealed plans to utilize the funds from a $1.3 billion convertible debt issuance to purchase Bitcoin — an increasingly favored approach for publicly traded firms aiming to enhance share performance.
GameStop’s declaration followed a day after it suggested establishing a reserve of cryptocurrencies, comprising Bitcoin and stablecoins tied to the US dollar.
Initially, investors welcomed the news, driving share prices up by 12% on March 26. However, shareholder sentiment turned on March 27, causing GameStop’s stock, GME, to plummet nearly 24%, as per Google Finance.
GameStop’s stock lost its gains on March 27. Source: Google Finance
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Frosty reception
Analysts suggest that the frosty reception indicates concerns that GameStop might be attempting to divert investors’ attention from more significant issues with its business model.
“Investors aren’t particularly optimistic about the core business,” Bret Kenwell, a US investment analyst at eToro, stated to Reuters on March 27.
“There are uncertainties regarding GameStop’s model. If Bitcoin is going to become the central focus, what happens to everything else?”
The sell-off also underscores a more pessimistic view among investors regarding Bitcoin as macroeconomic unrest, including ongoing trade conflicts, impacts the cryptocurrency’s market price.
Bitcoin is down approximately 7% year-to-date, restin at around $87,000 as of March 27, according to Google Finance.
Bitcoin’s “price briefly soared to $89,000 but has now reverted its path,” Agne Linge, head of growth at decentralized finance (DeFi) protocol WeFi, told Cointelegraph.
Linge emphasized that trade conflicts initiated by US President Donald Trump’s tariffs continue to be a worry for traders.
Public companies rank among the largest holders of Bitcoin. Source: BitcoinTreasuries.NET
Corporate Bitcoin reserves
GameStop is somewhat of a latecomer in the realm of public companies establishing Bitcoin reserves.
In 2024, surging Bitcoin values propelled Strategy’s shares by over 350%, according to information from FinanceCharts.
Founded by Michael Saylor, Strategy has invested over $30 billion acquiring BTC since pioneering corporate Bitcoin accumulation back in 2020, according to data from BitcoinTreasuries.NET.
Strategy’s achievements encouraged numerous other firms to create their own Bitcoin reserves. Public companies collectively hold about $58 billion worth of Bitcoin as of March 27, as indicated by the data.
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