GameStop stock slides 23% after announcing strategy shift and plans to buy $1.3 billion worth of Bitcoin
Bitcoin shares.
The company said on Tuesday, the board of directors voted unanimously to raise $ 1.3 billion to buy bitcoin, with a “large number” closed at the same time of the retail stores. Although the news was received with a stumbling block on the same day on the same day, the initial excitement faded quickly. On Thursday, the shares of retailers in the besieged video games decreased by 23 % over the past 24 hours.
The new Gamestop plan includes investing a portion of the company’s “cash or debt and shares” of the company in Bitcoin, according to the SEC deposit. The company will raise funds to buy Bitcoin by submitting transferred notes – a set of debts and stock financing – for its investors. The company said in the file of securities and the stock exchange that the aim of the new investment strategy is to “provide sufficient liquidity to meet the company’s daily financial obligations and improve investment revenues.”
Gamestop has been struggling for years, and played the role of starring in one of the most strange business stories in the contract so far, after the company’s shares increased unexpectedly in 2021 thanks to a popular uprising for retailers. But despite the increase in wild stock prices (which later turned into a movie), the company is facing a long -term transformation in customer appetite over the past decade of digital video games. Gamestop recorded a 28 % decrease in sales from 2023 to 2024, with a decrease from $ 5.3 billion to $ 3.8 billion, according to the SEC report from Tuesday, and closed a quarter of its sites during the past year.
The company did not immediately respond to a request to comment from luck.
Gamestop is not the only company that changes their business model to focus more on encryption investment. The Bitcoin software strategy was adopted as a reserve asset in 2020, and has witnessed the increase in stock prices by more than 3000 % in the past five years after collecting 500,000 Bitcoins. The shares of the company have become attractive to investors who want to reach Bitcoin price movements, but they do not want to keep the currency directly.
But although this plan has succeeded in the strategy yet, it may not work with other companies. Michael Patter, an analyst at the Investment Management Company, said, luck By comparison, Gamestop shares will be more expensive and make a fewer bitcoin.
“There is an opportunity for companies to buy an encrypted currency that does not exist for individual investors, so that it explains some of the attractiveness of Microstrategy,” Batshir said, in reference to the strategy in its old name. “However, Microstrategy is trading lower to its liquid origins of Gamestop deals.”
This story was originally shown on Fortune.com
2025-03-27 17:31:00
