GameStop Shares Tumble After Bitcoin Treasury Move and $1.3B Bond Offering

GameStop (GME) shares plunged 25% on Thursday, erasing gains sparked earlier this week by the company's announcement to adopt Bitcoin (BTC) as a treasury reserve asset. The stock fell to just above $21, marking its lowest level since October and down over 28% from Wednesday’s peak near $30.

The steep drop followed GameStop’s surprise $1.3 billion zero-coupon convertible note offering revealed late Wednesday. The plan, aimed at funding its BTC acquisition, initially excited crypto enthusiasts. However, the enthusiasm quickly faded as investors scrutinized the financing strategy.

Louis Liu, CIO of Mimesis Capital, noted on X that “many existing shareholders dislike the move,” prompting heavy sell-offs. Analysts suggest the sell-off may also relate to the convertible bond pricing period, with potential investors shorting the stock ahead of the deal. CoinDesk’s James Van Straten drew parallels to similar drops in MicroStrategy (MSTR) and Semler Scientific (SMLR) during their own convertible note announcements.

Wedbush analyst Michael Pachter, who rates GME “underperform,” compared GameStop’s move to MicroStrategy’s BTC playbook but questioned its logic. “GME trades at more than twice its cash, while MSTR is under 2x its BTC holdings,” he said. “We expect the offering to fall flat.”

Pachter added, “Why would anyone pay over 2x cash value just for a company to buy BTC, when they could buy BTC or a Bitcoin ETF directly?”

Bitcoin bull Michael Saylor has long promoted BTC as a corporate reserve, inspiring firms like GameStop. Yet not everyone agrees. Noted crypto skeptic Peter Schiff criticized the strategy, calling it a “waste of cash” and warning that investors are now waking up as the hype fades.