GameStop’s stock is playing it cool, too cool, actually, despite pulling in an extra $450 million through its private convertible note offering. You’d think a move like this would send shares into the stratosphere, but nope. The funds, which are earmarked for general corporate purposes (aka investments and potential acquisitions), could also include Bitcoin. But here’s the kicker: GameStop hasn’t specifically mentioned Bitcoin yet, though they’ve hinted at growing a treasury in the past.
Let’s do the math. If GameStop goes all-in and drops the full $450 million on Bitcoin, it could nearly double its existing stash of 4,710 Bitcoin. Now that’s some serious crypto action! So, why is the stock still trading sideways?
The Hype Around Bitcoin and GameStop’s Struggles
In Monday’s trading session, GameStop shares opened at $23.03, but they quickly dipped to $22.45—a 2.5% drop. Sure, the stock had a small recovery, finishing Wednesday at $23.55, up 1.8% in the last five days. But let’s not forget that GameStop’s stock price also dropped by 11% back in May, even after it announced plans to buy $500 million worth of Bitcoin. What’s going on here?
Meanwhile, other companies like Japan’s Metaplanet saw their stock surge by 22% after announcing Bitcoin buys. DigiAsia Corp’s stock spiked 91%, and Blockchain Group’s share price surged 225% after a Bitcoin purchase in March. It’s safe to say that GameStop is missing the boat on this one.
But here’s the thing, I think it’s not just about buying Bitcoin. Sure, it sounds cool and all, but as Vincent Liu, CIO at Kronos Research, pointed out, it’s all about having a strategy. Simply adding Bitcoin to your balance sheet without a clear vision or execution won’t cut it.
“If it’s just hype or a ‘sell the news’ event like GameStop, the impact will be muted,” Liu said.
Now, let’s not forget GameStop’s other crypto ventures. The company briefly dipped its toes in the crypto space with a crypto wallet for users, but it shut that down in November 2023 due to regulatory uncertainty. They also launched an NFT marketplace, only to close that down in January 2024 for the same reason. I mean, come on, GameStop, how about a little consistency?
GameStop became the face of meme stock success in 2021, when a short squeeze sent its stock soaring over 1,000% in just a month. But these crypto moves? Not quite as explosive as their last big stock rally. Let's see if they can turn it around, or if this Bitcoin strategy ends up being just another “sell the news” moment.
Roman Zaika
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