Staff Reporter

GameStop’s stock fell 22% on Thursday as the company’s plan to pivot towards bitcoin raised alarms among investors about its timing and overall strategy to revive its struggling retail operations.

The video game retailer’s shares not only erased gains from the previous day but were also on track for their largest single-day decline since last June. This drop followed the announcement that GameStop would issue $1.3 billion in 0% convertible bonds due in 2030 to fund its cryptocurrency purchases.

The initial news about GameStop’s move to acquire bitcoin as a treasury reserve asset had sparked excitement among retail traders, particularly those tracking the so-called “meme stock.”

However, the company also revealed it would be closing a “significant number” of stores this year, indicating ongoing difficulties in its retail business despite efforts to turn things around.

“Investors aren’t feeling optimistic about the core business,” noted Bret Kenwell, a U.S. investment analyst at eToro. “There are real questions about GameStop’s model. If bitcoin is the new focus, what happens to everything else?”

The timing of GameStop’s bitcoin investment is particularly noteworthy, as the cryptocurrency has risen nearly 27% since the presidential election in November, although it remains well below its all-time highs due to uncertain economic conditions.

“Why did GameStop wait so long if they intended to take this direction? Six months or nine months ago would have made much more sense,” Kenwell added.

The debt issuance to fund bitcoin purchases parallels strategies used by major bitcoin holders, further complicating the narrative.

The broader crypto market outlook is also weighing on GameStop’s stock, with experts stating that the company’s move has “failed to significantly bolster market confidence,” according to Agne Linge, head of growth at decentralized bank WeFi.

Shares closed at $22.09, and with the day’s losses, GameStop’s stock has now dropped 30% this year.