Mar 29, 2025
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GameStop Shares Fall 25% Following Bitcoin Treasury Announcement
GameStop (NYSE: GME) experienced a 25% decline following an initial 16% rally on March 26, triggered by the company's decision to establish a Bitcoin treasury. This move initially excited investors but led to heavy selling pressure, wiping out nearly $3 billion in market value.
Key points include:
- The board's strategy is similar to MicroStrategy's prior Bitcoin acquisitions.
- Analyst Han Akamatsu noted that institutional buyers may be shorting GME stock to hedge against the new convertible notes issued for Bitcoin purchases.
- Akamatsu referenced past instances where such strategies created artificial short pressure on stocks and suggested potential for a squeeze if GME or Bitcoin prices rise significantly.
- Critics question whether this approach has increased risk, with some investors expressing concern over the substantial market value loss.
Akamatsu emphasized that the current situation aligns with MicroStrategy's playbook and suggests patience during potential price retracements, indicating a possible buying opportunity as GME tests historical patterns.
As of the latest update, GME shares are priced at $22.30.
