GameStop fails to woo traders with $450M raise, possibly for Bitcoin

GameStop shares have traded sideways despite another $450 million raise as part of its private convertible note offering for investments, which could include Bitcoin.

The retailer disclosed to the US Securities and Exchange Commission on Monday that someone who opted into the initial $2.25 billion note offering has decided to purchase an additional $450 million.

The funds have been earmarked for general corporate purposes, including investments and potential acquisitions. Bitcoin (BTC $107,775) wasn’t specifically mentioned, but the retailer has flagged plans for growing a treasury in the past.

At current prices, with Bitcoin trading at roughly $108,000, if GameStop used the full $450 million for Bitcoin purchases, it could nearly double its existing treasury of 4,710 Bitcoin.

GameStop’s Bitcoin moves miss out on stock surges

In the Monday trading session after its filing, Google Finance data shows GameStop shares (GME) dropped from an opening price of $23.03 down to a low of $22.45, representing a 2.5% drop.

The stock price has recovered slightly and is up over 1.8% in the last five days, trading at $23.55 after the closing bell on Wednesday; however, it has also dropped 0.38% in after-hours trading. 

GameStop shares are up 1.8% over the five days but have also dropped slightly in after-hours trading. Source: Google Finance 

The share price movements resemble those from May, when GameStop stock also failed to rise despite the retailer announcing it was buying half a billion dollars worth of Bitcoin. GameStop shares instead dipped around 11%. 

Meanwhile, other companies, such as Japanese investment firm Metaplanet, saw share prices spike up to 22% after announcing Bitcoin buy plans.

Indonesian fintech firm DigiAsia Corp stock also saw a spike of 91% and Paris-based crypto company Blockchain Group saw its stock surge 225% after a Bitcoin purchase in March.

Bitcoin treasury plans aren’t enough 

Speaking to Cointelegraph, Vincent Liu, the chief investment officer at Kronos Research, said that while companies are adopting Bitcoin to diversify treasury risk and tap into new liquidity amid bloated national USD debt levels, buying Bitcoin isn’t enough. 

A Bitcoin treasury rollout requires “a well-planned strategy to protect capital and strengthen liquidity,” because without “clear execution and long-term vision, it’s unlikely to deliver sustained value,” Liu said. 

It’s not just buying Bitcoin. It’s how and why. Clear strategy and strong execution build trust and attract liquidity, but if it’s just hype or a ‘sell the news’ event like GameStop, the impact will be muted.

GameStop’s other crypto ventures

GameStop previously made forays into the crypto space with a crypto wallet for its users, which it eventually shut down in November 2023 due to regulatory uncertainty.

It launched an NFT marketplace, which was also eventually shuttered in January 2024, due to similar concerns about regulatory uncertainty.

GameStop is also considered the first example of meme stock success after a short squeeze in 2021 sent the stock surging over 1,000% in a month as traders flipped the table on hedge funds that had been making money shorting on the company.