GameStop Raises $2.7 Billion for Bitcoin Push Amid Retail Decline

GameStop has recently secured an additional $450 million in capital, bringing its total raise to $2.7 billion. This funding is part of the company's strategy to invest in Bitcoin as a treasury reserve asset, mirroring a strategy previously employed by Strategy. However, unlike Strategy, GameStop's retail business is currently in decline, which adds a layer of risk to its Bitcoin push.

GameStop's recent filing with the U.S. Securities and Exchange Commission revealed that the company has secured an additional $450 million through the full exercise of a “greenshoe” option tied to its $2.25 billion convertible notes offering. This brings the total capital raise to $2.7 billion, which the company plans to use for corporate investments, including acquiring Bitcoin as a treasury reserve asset.

GameStop's aggressive pivot to Bitcoin echoes a strategy previously used by Strategy, which began stockpiling Bitcoin in 2020 amid macroeconomic uncertainty and balance sheet stagnation. However, there are key differences between the two companies. Strategy was a steady software firm when it began buying Bitcoin, while GameStop is a declining retailer. Strategy's core revenue has shrunk modestly, but its business remains intact. In contrast, GameStop's fundamentals are deteriorating, with Q1 2025 revenue dropping 17% and the company closing over 400 stores.

Strategy's Bitcoin strategy has massively inflated its balance sheet, with total assets ballooning from $2.4 billion in 2022 to over $43 billion as of Q1 2025. This is a 591% annual increase. Additionally, the firm has more than tripled its stock price, largely untethered from the fundamentals of its core enterprise software revenue. By contrast, GameStop's long-term growth trend remains negative, making the Bitcoin pivot feel less like vision and more like a gamble.

Market reactions to GameStop's Bitcoin push have been jittery. GME shares plunged 20% after the initial convertible note announcement in June, barely a month after its first Bitcoin acquisition. Unlike Strategy, which has historically traded at a premium to its BTC holdings, GameStop has yet to build that investor confidence.

The success of GameStop's Bitcoin strategy will largely depend on Bitcoin's price. Strategy's success relied on Bitcoin's bull runs, with its $70,681 average cost basis versus the current $107,798 BTC price meaning even a significant crash wouldn’t wipe out gains. GameStop, however, entered the race when Bitcoin was trading above $108,000 in May, leaving almost no margin for error. Worse, GameStop’s $1.48 billion in long-term debt demands constant market access. If Bitcoin stagnates or dips, the company could face a liquidity crunch, something Strategy avoided by front-running the 2021 and 2024 rallies.