On Thursday, GameStop stock fell more than 25% during the day after announcing a $1.3 billion Bitcoin bet.
Following the announcement of a strategic shift that involved issuing $1.3 billion in convertible bonds to finance the purchase of Bitcoin, there was a decline. These 0% convertible senior notes, which mature in 2030, will be offered for private sale by the video game retailer.
GameStop Stock Faces Over 25% Decline In One Day
The company’s board approved an updated investment policy earlier this week, which calls for the proceeds to be used for general corporate purposes, including buying Bitcoin. GameStop‘s stock rose more than 14% during yesterday’s aftermarket hours, but it started at $25.78 and fell to a low of $21.16 per share.
This action puts GameStop in line with other businesses, such as MicroStrategy, that are incorporating Bitcoin into their treasury reserves. Analysts and investors, however, are concerned about the timing and execution.
Is Gamestop Focused on Bitcoin Treasury?
Bret Kenwell, an eToro investment analyst in the United States, questioned the company’s direction, saying there were questions about GameStop’s model. What happens to everything else if Bitcoin becomes the pivot?
Plans to close a sizable number of additional stores this year were also included in the announcement, indicating that GameStop’s core retail operations continue to face difficulties. Investor mistrust of the company’s long-term sustainability and strategic focus has increased.
