NewsBTC
27 March 2025
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GameStop Plans to Raise $1.3 Billion for Bitcoin Investment

GameStop's stock (GME) fell over 8% in after-hours trading following the announcement of a $1.3 billion capital raise to invest in Bitcoin via convertible senior notes. This decision came after a 12% surge in shares related to the company's plan to designate Bitcoin as a treasury reserve asset.

Key Developments

  • GameStop plans to raise $1.3 billion for Bitcoin investments.
  • The board approved Bitcoin as a treasury reserve asset.
  • CEO Ryan Cohen's association with Michael Saylor sparked speculation about cryptocurrency investments.

Concerns from Analysts

  • Wall Street analysts express skepticism about GameStop's investment strategy, citing inconsistent past strategies.
  • Wedbush analyst Michael Pachter highlighted concerns regarding stock valuation based on Bitcoin holdings.

Financial Performance

  • GameStop reported $1.28 billion in net sales for Q4, a 28% decline year-over-year.
  • Adjusted EBITDA for the fiscal year fell to $36.1 million from $64.7 million the previous year.

Bitcoin has shown volatility, recently dropping from its record high of $109,000 to around $76,000 but recovering to approximately $87,477.