GameStop's Stock Drops 11% After $512 Million Bitcoin Purchase

GameStop's stock price has been on a downward trajectory following the company's announcement of its first significant Bitcoin purchase. On Wednesday, GameStop's shares briefly reached nearly $36, marking the highest price point in almost a year. However, this upward momentum was short-lived as the stock began to decline shortly after the company disclosed its acquisition of $512 million worth of Bitcoin. The news of this substantial investment in cryptocurrency triggered a nearly 11% drop in GameStop's share price on May 28. This decline indicates that investors may be uncertain about the strategic direction of the company, particularly its foray into the volatile world of digital currencies. The purchase of Bitcoin was part of a broader funding round that GameStop completed in March, raising $1.3 billion. This move suggests that the company is looking to diversify its assets and potentially tap into the growing interest in cryptocurrencies. However, the market's reaction to this announcement highlights the risks associated with such investments, as the stock price continues to sink despite the company's efforts to innovate and adapt to changing market conditions.

GameStop's stock price fell for the second straight day after the company announced its first-ever Bitcoin buy in excess of $500 million Wednesday morning. The stock finished the trading day down over 5% to $29.57 per share, diving further after a nearly 11% daily drop by the end of the trading day Wednesday. The Nasdaq-listed stock has lost most of its weekly gains, now up just more than 1% over that span. The firm has now seen that kind of Bitcoin-related volatility on multiple occasions. GameStop's stock price rose in late March when it initially disclosed its plans to add Bitcoin as a treasury asset, but then fell soon after when the company announced plans to raise up to $1.5 billion to buy BTC rather than tap into its cash reserves. The continued decline in GameStop's price over the last two days comes as Bitcoin itself struggles to hold onto recent gains after setting a new all-time high price last Thursday. After peaking at a new high of $111,814 on May 22, the price of Bitcoin has gradually fallen, now down more than 5% since then to a current mark of $105,957. Other major assets like Solana, XRP, and Dogecoin have fallen harder over the last seven days, while Ethereum is down less than 1% during that span.

GameStop announced early Wednesday that it acquired 4,710 Bitcoin, valued at $512 million at the time and about $499 million as of this writing. The firm raised just shy of $1.5 billion to put towards the Bitcoin treasury initiative, and CEO Ryan Cohen said during a video interview at Wednesday's Bitcoin 2025 conference that the firm is "not going to call our shots in advance" regarding potential future BTC buys. Strategy, the largest corporate Bitcoin treasury holder with over $61 billion worth of Bitcoin, pioneered the model that GameStop is following. It has propelled Strategy's stock to new heights in recent months, and helped boost many other smaller firms that have adopted their own crypto strategies in recent months. GameStop investors, however, don't appear to be as excited about the retailer's latest crypto embrace—at least so far.