GameStop Dives Headfirst Into Crypto: Are They Really This Brave?

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Ah, GameStop! The retail giant renowned for its profound expertise in video games has, of course, decided to dabble in the ever-so-stable world of cryptocurrency. What could go wrong? The company, which has been gracing the stock market with its ups and downs, saw its stock (GME) plummet by over 8% in after-hours trading on Wednesday. This delightful tumble came just after the announcement that they plan to raise a cool $1.3 billion to buy Bitcoin (BTC), with the help of convertible senior notes. Truly, nothing says “we’ve got this” quite like this bold move. 😎

This bit of news followed a veritable rollercoaster ride, as just the day before, GameStop shares had surged nearly 12% when the board revealed that Bitcoin was now a “treasury reserve asset” in their investment policy. Apparently, being a retailer wasn’t cutting it anymore—cryptocurrency was the answer all along! Or, you know, something like that. 🙄

GameStop’s Grand Bitcoin Adventure

So what exactly is GameStop’s grand plan here? Well, it seems they’ve caught the cryptocurrency fever, one that’s been sweeping the globe, and decided that now was the perfect moment to jump in. Word on the street is that a month ago, GameStop was already eyeing the digital currency scene. A harbinger of change, no doubt.

The speculation grew when CEO Ryan Cohen posted a photo with none other than Michael Saylor, CEO of Strategy (MSTR), a man who’s made a fortune off Bitcoin. Saylor’s company boasts more than 447,000 BTC tokens. His strategy, clearly, has been a resounding success—after all, MicroStrategy’s stock has climbed over 84% in the past year, all thanks to Bitcoin’s skyward rise. But, alas, Wall Street analysts remain unconvinced that GameStop can emulate such success. Who could blame them? 😏

Skepticism? Surely Not!

“Their strategy, which has changed about six times in three years, is to buy cryptocurrency and be just like MicroStrategy,” said Michael Pachter, an analyst at Wedbush, in the most diplomatic way possible. He went on to express serious doubts about the plausibility of this approach, especially considering that MicroStrategy trades at around twice its Bitcoin holdings. GameStop, if they were to buy all Bitcoin with their $4.6 billion in cash, might find their stock dropping five bucks faster than you can say “digital currency debacle.” 💸

And as if to add insult to injury, GameStop reported its fourth-quarter earnings just after the market closed on Tuesday. Net sales for the quarter were a mere $1.28 billion, a 28% drop from the previous year. How very… heartwarming. For the full fiscal year, they reported an adjusted EBITDA of $36.1 million, down from $64.7 million the year before. The plot thickens! 🍿

But wait! Experts warn that perhaps GameStop’s newfound infatuation with Bitcoin might be a tad risky, given the coin’s notorious volatility. You see, Bitcoin’s price took a dive of over 25% from its record high of $109,000. It’s now languishing at $76,000—an all-time low since November 2024. Yet, of course, the leading crypto has managed a slight recovery, rising to around $87,477. But will it hold? 🤔 Only time will tell. Let’s grab our popcorn!

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2025-03-27 09:42