Shares of Gamestop (GME), the Embated video game dealer turned Memestock Darling, threw 25% on Thursday, more than deleting all the winnings since the company announced earlier this week that it will add Bitcoin (BTC) as a state reserve asset.
GME fell to just over $ 21 during the session and traded at its lowest price since October and down over 28% from its Wednesday top of almost $ 30.
Price action happened after the company revealed plans late Wednesday for a $ 1.3 billion, 0% convertible note offering to raise money for its BTC acquisition plan. After an initial wave of euphoria among the crypto audience, Hype died on Thursday after investors took a closer look at the funding.
“Many existing shareholders do not like the move, so a big volume switch happens,” said Louis Liu, head investment manager for Mimesis Capital, in an X post.
The sharp sales may also have to do with the pricing period of convertible bond, as potential bond buyers may be selling or short -circulating the stock. James van Straten, senior analyst at Coindesk, noted that Microstratey (MSTR) and Semler Scientific (SMLR) shares also fell in prices for their convertible note offers.
“We suspect GameStop’s share price will operate lower before the issue of conversion, especially considering that a conversion investor will receive a zero coupon and will be required to believe that Gamestop -Meme -phenomenon will continue for another five years,” said Wedbush analyst Michael Pachter, who has a underperform -rating in Gme.
Pachter claimed that the company follows the strategy’s playbook, but Mstr is dealing with less than twice as much as the value of its bitcoin, while GME deals with more than twice as much as its cash stocks.
“We expect the offer to fall flat,” Pachter continued. “We have a hard time understanding why every investor would pay more than 2x cash value for the potential for gamestop to convert these cash to BTC, especially as the same investors can invest in BTC or a BTC ETF itself.”
GME is only the latest Wall Street company that converts some of its cash to Bitcoin. The trend started with strategy, the company led by Bitcoin spokesman Michael Saylor, who many years ago announced that it would use its cash reserves to buy cryptocurrency. Mstr’s success after the transition caused many other companies to follow, especially recently as US President Donald Trump has promised to make the United States the Center for Digital Asset Development.
While Sayylor has long guaranteed several companies, especially those with large cash reserves, and even the United States as a country, to adopt Bitcoin as a reserve strategy, not everyone agrees.
“Games at companies buying Bitcoin are not a good investment strategy,” said the well-known Bitcoin Gadfly Peter Schiff in a post of X. “$ GME has lost all yesterday’s Bitcoin-inspired 15% win.”
