Why GameStop Stock Dropped 20% After Announcing Bitcoin Accumulation

The trend of establishing strategic Bitcoin reserves often benefits companies immediately, most notably a rise in stock prices. But that’s not what happened with GameStop’s stock.

Its price has plunged 20% since the company confirmed its first Bitcoin purchase on May 28. So why did the market react so negatively?

Why Investors Responded Poorly to GameStop’s Fundraising Move

In late May, GameStop attracted attention by spending $513 million to buy 4,710 BTC. This marked a bold step for the company to diversify its portfolio. It became the 13th-largest public holder of Bitcoin.

Recently, the company announced a plan to offer $1.75 billion in senior convertible notes privately. This move is expected to strengthen GameStop’s capital base. However, the announcement did not clarify whether the funds would be used to buy more Bitcoin.

Still, many investors speculated that the new capital might go toward further Bitcoin purchases.

GameStop (GME) Price Performance. Source: Google Finance.

After the announcement, GameStop’s stock (GME) dropped 6%, falling from over $30 to $28.50. From the price on May 28—the day GameStop revealed its Bitcoin acquisition—the stock has declined by 20%.

GameStop’s Q1 2025 earnings report added to the pressure. The company reported a 17% year-over-year revenue drop, missing analysts’ expectations.

“Net sales were $732.4 million for the period, compared to $881.8 million in the prior year’s first quarter,” the company stated in its report.

This disappointing performance and the lack of clear commitment to using raised capital for a Bitcoin strategy have shaken investor confidence.

In contrast to GameStop, Metaplanet’s shares soared by 5,000% following an ambitious Bitcoin treasury strategy. A positive earnings report bolstered this stock rally. It highlights the importance of Bitcoin accumulation and new revenue growth to sustain the stock’s upward momentum.

GameStop’s current situation reflects the tension between its ambition to innovate and the pressure from traditional markets. Accumulating Bitcoin could lead to major gains if the crypto market surges. However, it also exposes the company to risk, especially as investor trust erodes.

Recently, Sygnum warned that Bitcoin acquisition vehicles relying on leverage risk could cause market instability. Such strategies could trigger liquidations and even insolvencies.