GameStop Stock Declines After First-Ever Bitcoin Buy Worth Half A Billion

GameStop (GME) shares declined as much as 5% at the opening bell on Wednesday after the company announced it had bought Bitcoin (BTC) worth over half a billion dollars, marking its first investment in the apex cryptocurrency.

The video games retailer bought 4,710 BTC worth $512.6 million, according to Bitcoin’s price of $108,837 on Wednesday. The cryptocurrency has fallen 0.6% in the last 24 hours, according to CoinGecko data.

Bitcoin’s price is trading 2.6% below its all-time high of $111,814, hit last week amid easing trade tension and buoyed by Moody’s downgrade of the U.S. sovereign debt–the last of the three big credit agencies to issue a downgrade, highlighting Bitcoin’s appeal as an alternate store of value.

GameStop announced it would be pivoting to a Bitcoin-based treasury strategy, following in the footsteps of Michael Saylor-led Strategy (MSTR), in March. Management stated that there is no limit on the amount of Bitcoin the company may ultimately purchase. 

The company announced a debt raise of $1.3 billion from convertible bonds to buy Bitcoin within days of the announcement.

Market watchers believe that GameStop’s pivot towards Bitcoin is part of the company’s latest efforts to revive its business. CEO Ryan Cohen, who took the helm in September 2023, has been focused on cutting costs and streamlining operations in an effort to reverse the company's losses.

GameStop’s stock has gained 10% this year and more than 50% over the past 12 months. In comparison, Bitcoin’s price has increased by over 16% this year, with gains of 57% over the past 12 months. 

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Editor's Note: The story and the headline have been modified to reflect the change in stock price.