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GameStop relies on Bitcoin: risk or lifeline for the stock?
GameStop invests in Bitcoin to minimize currency risks. The strategy leads to stock losses and uncertainty.
GameStop relies on Bitcoin: risk or lifeline for the stock?
GameStop made a significant decision by purchasing a total of 4,710 Bitcoins between May and June 2025. CEO Ryan Cohen called these purchases “protection against currency devaluation and systemic risks.” This strategy is part of a broader new corporate strategy that GameStop is pursuing to compete in a volatile market. However, the Bitcoin purchases also attract criticism because they are part of a risky plan.
To finance Bitcoin purchases and potential acquisitions, GameStop has increased its planned issuance of convertible bonds. Originally a sum of 1.75 billion dollars was planned, now it will be 2.25 billion dollars. These convertible bonds are non-interest bearing and have a maturity in 2032. However, following the announcement of these measures, GameStop shares experienced a decline, at times exceeding 20%.
Stock performance and financial position
On Friday, the shares recovered slightly to 19.20 euros after falling 26% in the previous week. The stock has already lost 36% since the beginning of the year and is currently 40% below its 52-week high. The latest quarterly figures show a profit of $45 million, but a 17% decline in sales. Interestingly, sales of collectibles increased by 55%, which is a positive development.
Current market developments show that there is high demand for call options, indicating speculation that prices could rise again. However, despite these positive signs, GameStop is facing a $4.5 million lawsuit over data breaches, adding to uncertainty about the company's future.
Strategic considerations and investor opinions
The decision to invest significantly in Bitcoin was viewed by Nathan Cox, CIO of Two Prime Digital Assets, as a strategic opportunity in a volatile market. However, there are concerns as the cryptocurrency is controversial due to its high level of speculation and significant price fluctuations. The investment is similar to the strategy of the company MicroStrategy, which has been purchasing Bitcoin on a large scale since August 2020 and now holds more than 500,000 Bitcoins.
With over $4 billion in cash and sales of $3.8 billion in 2024, GameStop is in a good financial position, but given current developments, investors should wait before investing in the stock. The uncertainties surrounding the Bitcoin strategy and the lawsuit place additional strain on the company's long-term prospects.