GameStop Followed the Crowd Into Bitcoin… And There Aren’t Many Chairs Left When the Music Stops

Gamestop dropped 22% the moment it said, “Hey, what if we bought a boatload of Bitcoin?” Most companies would take that kind of stock market reaction as a hint. Like, “Hey, maybe don’t light hundreds of millions of dollars on fire in a highly volatile asset.” But Gamestop saw the red candles and said, “Oh heck yeah. Let’s make it a full send.”

 

This morning, the former video game retailer/current finance meme confirmed it officially bought 4,710 Bitcoin… worth around $512.6 million at the time of purchase. This is not a joke, they spent over half a billion dollars on a currency you can’t use to buy a single copy of Call of Duty: Modern Warfare III in their stores. Back in March, GameStop said it would raise $1.3 billion through convertible bonds… a fancy way of saying, “We’ll borrow your money now, maybe pay you in stock later if things don’t blow up.” It’s debt with a lottery ticket attached.

The pitch was that this would fund “alternative assets,” which really means “We don’t really know what to do with our cash, but Michael Saylor seems happy, so let’s try that.” The stock market hated the idea. Shares of GME tanked like it had just been rug-pulled. But in true Gamestop fashion, they ignored the haters, pulled on their diamond hands, and went full Michael Saylor anyway. Only difference? MicroStrategy at least had software revenue. Gamestop has… retro games, oversized Funko Pops, and now a nine-figure Bitcoin wallet.

To be fair, Bitcoin’s been having a moment. It hit $112K last week after Moody’s gave the U.S. a debt downgrade and investors collectively decided that trusting Satoshi might be more stable than trusting Congress.

So why now? Honestly, I’ve asked myself that question more than once this morning. From the outside, it looks like CEO Ryan Cohen is hell-bent on turning GameStop into something completely unrecognizable. And part of me respects that. The guy walked into a brick-and-mortar video game retailer on life support and started swinging. He cut costs like a man on a mission… shrinking SG&A expenses from $1.7 billion to $1.2 billion in a year, closing stores, and forcing the company to actually make money for once. They even posted a profit in Q4, which I’ll admit, shocked me.

But fixing the books wasn’t going to be enough. The core business is aging fast. So Cohen started killing off side quests too… like the NFT marketplace they launched in 2022 that nobody asked for and even fewer used. That’s gone now. Quietly deleted from the menu like a bad seasonal item at Taco Bell. And now here we are. GameStop has a $4.76 billion cash pile and apparently no desire to reinvest in the stuff that originally made it a household name. So they went and threw 10% of that pile into Bitcoin.

I have mixed feelings. On one hand, I get it. BTC’s hot again, up over $112K recently, and the whole “trust Satoshi more than the Fed” narrative has legs. It’s a big swing, and if you’ve got cash and nothing to lose, why not take a shot? On the other hand... this is GameStop. A company I still associate with cringey trade-in offers and walls of pre-owned titles. Watching them turn into a corporate Bitcoin whale is surreal. It's like if Enron came back as a hedge fund.

But maybe that’s the whole point. Cohen’s not trying to revive GameStop’s past… he’s trying to light it on fire and build something entirely different from the ashes. Unfortunately, the market’s not exactly clapping. The stock’s down 3% today (at the time of this writing).

And here’s the thing: GameStop’s not alone. Everyone and their cousin seems to be trying the Michael Saylor playbook now… raise a mountain of debt, convert the treasury into Bitcoin, and hope the laser eyes handle the rest. But let’s be honest: not every company can ride the crypto wave like Saylor did. Eventually, someone’s going to copy the move a little too late, get caught holding the bag, and remind the rest of the market that “HODLing” isn’t a real business model.

PS: It’s a mess out there.

One day the market’s ripping, the next day it’s Black Monday all over again. Recent earning’s reports have been a total coin flip. One stock beats and explodes 30%… the next misses by a penny and gets sent to the Shadow Realm. And through it all, everyone’s begging for Jerome Powell to finally cave and cut rates.

But underneath all the panic headlines (“Inflation too sticky!” “Recession imminent!” “Tariffs round 4 incoming!”) something wild is happening…

We’re seeing violent price action. Especially in the small-cap space, where low floats and high anxiety are creating the perfect recipe for 100%+ pops before lunchtime. Some of these names are moving 200%+ in under 24 hours… and to our knowledge, NO ONE else is covering them.

Except us.

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Stock.News does not have positions in companies mentioned.