GameStop’s stock took a sharp hit, plunging over 20% in after-hours trading following the announcement of a $1.75 billion convertible note offering aimed at bolstering its financial position. The move, unveiled on June 11, 2025, targets institutional investors and includes an option to raise an additional $250 million shortly after issuance, signaling the company’s continued reliance on long-term debt financing 1.
While GameStop has not explicitly confirmed that the proceeds will be used to buy more Bitcoin, the company’s previous crypto move—purchasing 4,710 BTC worth approximately $513 million in late May—indicates a clear interest in expanding its crypto exposure. This purchase made GameStop the 13th largest corporate Bitcoin holder, according to BitcoinTreasuries.NET.
Despite this bold pivot towards cryptocurrency, investor reaction has been overwhelmingly negative. The stock dropped from $28.55 to $22.14, erasing gains made since the company announced its crypto adoption strategy in March. This decline reflects skepticism about whether Bitcoin can truly drive GameStop’s stock performance, especially given the volatile nature of crypto markets and the company’s declining core business metrics 2 3.
GameStop’s recent financials show a 17% year-over-year revenue drop to $732.4 million in Q1 2025, though it swung to an adjusted profit of $83.1 million from a loss the previous year. However, adjusted earnings fell compared to the prior quarter, underscoring ongoing challenges in its retail operations 2 4.
The market’s cautious stance contrasts with the board’s unanimous approval to align with Bitcoin-focused investment models, similar to MicroStrategy’s strategy. Yet, the stock’s sharp decline after the Bitcoin purchase announcement and the convertible note offering suggests that headline crypto adoption alone isn’t enough to restore investor confidence.
What This Means for Investors
• GameStop’s $1.75 billion convertible note offering is a significant capital raise, but it has triggered a sell-off, reflecting concerns about dilution and the company’s strategic direction.
• The Bitcoin bet, while innovative, has not translated into stock price gains, highlighting the risks of tying corporate value to volatile digital assets.
• Investors remain wary as GameStop’s core retail business continues to face headwinds, with declining sales and mixed earnings results.
• The company’s future moves, including potential acquisitions or further crypto investments, will be closely watched by the market.
In summary, GameStop’s aggressive crypto pivot and debt financing strategy have yet to pay off in the stock market, illustrating the complex interplay between traditional retail challenges and the allure of digital asset diversification.
