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Thursday 27th of March 2025 16:08:21

GameStop Tumbles on Plan to Issue Convertible Bonds to Buy Bitcoin

GameStop Corp., the video game retailer, saw its stock price plummet by over 36% on Tuesday after announcing plans to issue convertible bonds to fund its foray into the world of cryptocurrency.

The company revealed that it plans to use the proceeds from the bond offering to purchase $1 billion worth of bitcoin, marking a significant foray into the digital currency market. The move is seen as a major departure from GameStop's traditional business of selling physical and digital games, as well as gaming hardware.

The news sent shockwaves through the market, with investors questioning the wisdom of the move. The company's stock price tumbled to a low of $19.15 per share, its lowest level in over a year.

Analysts have expressed skepticism about the move, citing the volatility of the cryptocurrency market and the potential risks associated with investing in bitcoin. "This is a high-risk, high-reward move by GameStop," said one analyst. "While it's possible that the company could make a significant profit from its investment, it's also possible that it could lose a significant amount of money."

GameStop's CEO, George Sherman, defended the move, saying that the company is committed to exploring new opportunities and diversifying its revenue streams. "We believe that bitcoin has the potential to be a valuable addition to our investment portfolio," he said.

The news comes as GameStop struggles to adapt to the changing landscape of the gaming industry. The company has been facing intense competition from online retailers and digital game stores, leading to a decline in its sales and profits.

The company's decision to invest in bitcoin has sparked a heated debate among investors and analysts, with some seeing it as a bold move and others viewing it as a reckless gamble. Only time will tell if GameStop's foray into the world of cryptocurrency will prove to be a wise investment or a costly mistake.