GameStop Buys $512 Million Bitcoin, Shares Drop 10.9%

GameStop Corp. has made a significant move into cryptocurrency by purchasing 4,710 bitcoins valued at over $512 million, marking a strategic shift from its traditional video game retail business to digital asset investment. The acquisition aligns GameStop with firms like MicroStrategy, known for large Bitcoin holdings, and reflects CEO Ryan Cohen's efforts to revitalize the company through operational streamlining and new investment avenues. Despite the potential upside, GameStop's stock price fell sharply by about 9-11% following the announcement, as investors reacted cautiously to the company's pivot, which includes raising up to $1.5 billion through convertible notes to fund Bitcoin purchases. Analysts and experts point to Bitcoin's volatility as a risk for GameStop's investors, especially given the company's existing challenges in its core retail market. While GameStop's stock has shown some gains earlier in the year, the mixed investor response underscores the uncertainty around the firm's new cryptocurrency strategy. The move reflects a broader trend of companies adopting cryptocurrency treasuries, though GameStop's large scale and traditional retail background make its result notably distinct from smaller firms embracing crypto assets.