GME Stock Tumbles 12% to $31 on $515M BTC Investment – Rebound From Here?
Following the revelation of a substantial Bitcoin investment, GameStop's stock saw a dramatic reversal, ending a period of turbulent trading
Quick overview
- GameStop's stock surged over 6% after announcing a significant Bitcoin investment but quickly reversed course, dropping nearly $5.
- The company acquired 4,710 bitcoins, valued at approximately $515 million, as part of a strategy to include Bitcoin as a treasury asset.
- Despite the stock's volatility, GameStop has shown improved earnings in five of the last six quarters, with analysts expecting a positive Q1 report.
- Investor sentiment remains mixed, with enthusiasm from the crypto community contrasted by skepticism from traditional equity investors.
Following the revelation of a substantial Bitcoin investment, GameStop’s stock saw a dramatic reversal, ending a period of turbulent trading that was significantly influenced by cryptocurrencies.
GameStop Surges, Then Plunges on Bitcoin Investment Reveal
GameStop (NYSE: GME) made headlines on Tuesday with a strong performance, climbing more than 6% and peaking at $35.84 during the U.S. session. That momentum, however, reversed dramatically as the stock opened lower today and slid to around $30—a nearly $5 drop, wiping out the previous session’s gains.
The initial spike was driven by renewed risk appetite tied to crypto market momentum, but investor sentiment shifted rapidly after the company disclosed its acquisition of 4,710 bitcoin.
GameStop Stock Chart Daily – Falling Back in the Range
While GameStop didn’t disclose the exact cost of the purchase, the valuation at current prices is estimated at around $515 million. The company made the move as part of a broader shift to include Bitcoin as a treasury asset.
Bitcoin Booms Past $110K, But GME Sinks
Bitcoin has been rallying, recently breaking past the $112,000 mark and consolidating above $110,000, helping fuel speculative interest in crypto-aligned stocks. GameStop’s investment aligns with that enthusiasm, though markets responded with skepticism.
Today’s GME price plunge came shortly after the company confirmed the purchase, suggesting that while the crypto community may cheer the move, traditional equity investors remain cautious. The company had previously signaled this strategic pivot when it raised $1.3 billion via convertible notes in late March, earmarking those funds specifically for digital asset investments. A board vote had earlier approved the change in investment policy to formally allow Bitcoin holdings.
Q1 Earnings Outlook Adds Another Layer
Despite stock volatility, GameStop’s earnings trajectory remains positive. The company has posted improved results in five of the past six quarters. Analysts at FactSet expect adjusted earnings of 8 cents per share for the upcoming Q1 report—marking a turnaround from the 12-cent loss in the same quarter last year.
Conclusion: GameStop’s crypto ambition has added volatility to an already speculative stock, with the market split between enthusiasm for its strategic shift and concern over its execution. While the long-term impact of holding Bitcoin as a reserve asset remains to be seen, the immediate market reaction has been decisively negative. Investors will now watch upcoming earnings and further crypto disclosures for clues on where the stock heads next.
- Check out our free forex signals
- Follow the top economic events on FX Leaders economic calendar
- Trade better, discover more Forex Trading Strategies
- Open a FREE Trading Account
Related Articles
Sidebar rates
Related Posts
Save
Join 350 000+ traders receiving Free Trading Signals