GameStop Buys 4,710 BTC for $513M Amid 28% Revenue Drop

GameStop (GME) just made a big splash: they bought 4,710 Bitcoins for $513 million. They funded this through a $1.4 billion convertible note sale and announced it on their X account (formerly Twitter) on May 28. This is in line with what they hinted at in March about getting into digital assets as they continue to see retail sales decline.

The Bitcoin bet is giving GME a big boost. Over the last month shares are up 30% to $35.01 by May 27 and up another 3% in pre-market today to $36.30. Despite a 28.5% year over year revenue decline in Q1 2025 with revenues of $1.28 billion. GME is trading at a crazy 100x trailing P/E and only one analyst is still covering the stock and they have a “Strong Sell” rating with a target of $13.50.

GameStop Technical Analysis: Bullish Chart But Be Careful

GME’s chart looks bullish. Since mid April GME has been trending up in a rising channel and making higher lows. It’s above its 50 period EMA at $28.45 which is acting as support. A three white soldiers candlestick pattern has formed which is bullish.

• Key resistance levels to watch: $36.02, $37.19 and $38.65.

• These are also where we might see bearish candlestick patterns like a bearish engulfing or shooting star which would be a sign of exhaustion.

• The RSI is getting overbought so be careful.

• A break below $30.54 would be a reversal and invalidate the bullish setup.

GME’s High Risk Gamble: Smart Hedge or Diversification?

GME’s Bitcoin move comes at a time when their core retail business is under pressure. The crypto move has definitely gotten investors excited but it doesn’t change the fact that revenue is down 30% year over year.Some analysts see the Bitcoin buy as a smart hedge against GME’s retail issues while others see it as a diversification. With GME’s valuation already above retail sector norms and the 30% rally in the last month, it’s getting frothy.

For short term traders GME’s chart and momentum might be tempting. But for long term investors, keep an eye on the $36-$38 zone and watch for signs of exhaustion if broader market sentiment turns.