Why Shares of GameStop Are Tanking Today

Shares of the video game retailer GameStop (NYSE: GME) had tanked roughly 19%, as of 10:18 a.m. ET today. The company announced plans to issue $1.75 billion in convertible notes for "general corporate purposes, including making investments in a manner consistent with GameStop's Investment Policy and potential acquisitions."

GameStop may buy more Bitcoin

While GameStop in its press release did not specifically say that it would use the proceeds of the offering to buy more Bitcoin, the world's largest cryptocurrency, many suspect this is the plan and GameStop's investment policy now includes purchasing more Bitcoin.

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The company earlier this year raised capital through convertible notes. In late May, GameStop then purchased over $500 million worth of Bitcoin. GameStop appears to be following in the footsteps of MicroStrategy, now doing business as Strategy. In 2020, MicroStrategy began purchasing tons of Bitcoin and the stock has generated tremendous returns since. Strategy now regularly taps the capital markets to raise funding that it can use to then buy more Bitcoin.

GameStop was one of the original meme stocks in the craze that captivated markets in 2020 and 2021. However, the company's core business is still struggling. In the first quarter of 2025, GameStop reported nearly $45 million in profits, a significant year-over-year improvement, but revenue plunged 17%.

Can GameStop find its footing?

The company still doesn't seem to have a sustainable long-term strategy, and as Wedbush analyst Michael Pachter recently said in a research note, the stock still trades at a higher premium to its cash than MicroStrategy trades to its Bitcoin holdings.

Buying more Bitcoin may work if the price of Bitcoin keeps moving higher, but it also could lead to greater risk and volatility. Personally, if you like Bitcoin, I'd recommend just buying the asset itself and avoiding GameStop.

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