GameStop (GME) stock appears to have hit a wall on Thursday, following a huge week of gains thanks to the company’s BTC investment announcement. On Tuesday, the gaming retailer announced that it would begin investing in Bitcoin and also announced a new funding plan for the venture on Wednesday. GME stock climbed by double digits this week prior to Thursday, however, those shares have since sunk.
GME stock fell 22.82% on Thursday, completely reversing the gains it has made over the past week. GameStop erased a quarter of its value, shedding $3 billion in market capitalization. The falloff also represents the company’s largest drop since June 2024. On Wednesday afternoon, GameStop announced plans to sell $1.3 billion in convertible bonds to fund Bitcoin purchases. The move followed in the footsteps of fellow Bitcoin-investing giant Strategy, run by Michael Saylor.
The track record for companies adopting Bitcoin reserves shows remarkable stock performance in recent history. According to Bitcoin Treasuries data, around 88 public companies currently hold about 665,030 BTC, making them the second-largest category of Bitcoin holders after ETFs and such investment vehicles. Therefore, investors will be hopeful that Thursday’s dropoff is temporary.
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Unlike Strategy’s, however, GameStop (GME) shares reacted negatively to the funding news. Companies marketing large convertible debt sales tend to face short-term selling pressure. GameStop was no different on Tuesday, with its stock taking a strong tumble. The premium that GameStop is looking to offer on its bonds is less than the roughly 55% premium on a similar issue from Strategy in November. More recently, Strategy made a $2 billion sale in February that offered investors a more advantageous 35% premium. That, along with the terms on a growing slate of debt-like instruments offered by Strategy, suggest that investors are demanding more from the gaming giant.
GameStop stock closed off Tuesday at $22.08 a share.