GameStop’s stock price plunged more than 25% on March 27, wiping out nearly $3 billion in market value, according to Google Finance.
This drop came after the company announced plans to use proceeds from a $1.3 billion convertible debt sale to buy Bitcoin and other cryptocurrencies.
On March 26, GameStop announced its intentions to hoard Bitcoin, at first generating great enthusiasm among investors. The stock surged 17% that day. However, the euphoria was over, and by March 27, GameStop’s stock price plunged steeply, as indicated by Google Finance data.
Analysts say investors are suspicious about GameStop’s move toward Bitcoin, fearing it would distract from broader concerns with the company’s economic model.
Bret Kenwell, an investment analyst at eToro, pointed out that GameStop’s core business already faces challenges, and pivoting to Bitcoin raises more questions than answers.
Furthermore, the price of Bitcoin has been under pressure, losing around 7% year-to-date, trading at around $87,000, as per Google Finance. Some analysts, such as WeFi head of growth Agne Linge, opine that economic uncertainty across the world and trade tensions are leading investors to be more cautious about Bitcoin-related actions.
GameStop is following a growing list of public firms investing in Bitcoin. MicroStrategy, under the leadership of Michael Saylor, set this trend in 2020 and has gone on to purchase more than $30 billion of Bitcoin since then. This has seen MicroStrategy’s stock increase more than 350% in 2024.
As per BitcoinTreasuries.NET, public companies own collectively close to $58 billion of Bitcoin, reflecting growing interest in the cryptocurrency as a treasury asset.
Also Read: GameStop (GME) to Bet on Bitcoin: Board Approves For BTC Investment
