Key Highlights:
- GameStop shares plummeted nearly 6% on Thursday, contributing to a two-day drop of almost 20% following the announcement of its initial Bitcoins acquisition.
- The acquired 4,710 Bitcoins are valued at over $500 million at current market rates.
- The company’s Bitcoin treasury strategy was first revealed in March, alongside plans for a $1.3 billion capital raise to support further acquisitions.
GameStop (GME) has experienced another nearly 6% drop in its stock price as investors continue selling off their shares in response to the news of the company’s first Bitcoin purchase.
The company announced on Wednesday that it purchased 4,710 Bitcoins, a long-awaited step related to its cryptocurrency treasury strategy disclosed in March. At that time, GameStop initiated a substantial capital raise of $1.3 billion to facilitate these Bitcoin acquisitions.
Following the announcement, the stock witnessed a swift decline alongside a broader market downturn triggered by tariff announcements on Trump Liberation Day. However, shares rose over 60% in the weeks leading up to this announcement.
The recent downturn, nearing 20%, might simply reflect investor responses to the news after the substantial upward movement or perhaps an exhaustion concerning corporate Bitcoin treasury strategies, which have seemingly become prevalent lately.
Moreover, GameStop’s investment of about $500 million in Bitcoin, while significant, may disappoint some given the $1.3 billion capital raise announced previously, along with the several billion in cash already available on its balance sheet. With a $14 billion market capitalization, this acquisition appears relatively modest.
