GameStop Acquires 4,710 Bitcoin for Corporate Treasury, Stock Falls 10.85% in Sell-the-News Reaction

GameStop (NYSE: GME), the video game retailer known for its role in the 2021 meme stock frenzy, has made a significant move into the cryptocurrency space by purchasing 4,710 Bitcoin (BTC), valued at approximately $512 million at the time of disclosure. This acquisition marks the company’s first confirmed Bitcoin investment since announcing plans in March to allocate a portion of its corporate treasury to the leading cryptocurrency. The news, revealed through a Form 8-K filing with the U.S. Securities and Exchange Commission (SEC) on May 28, triggered a sharp 10.85% drop in GameStop’s stock price, closing at $31.21, reflecting a classic “sell-the-news” market reaction.

A Strategic Leap into Bitcoin

GameStop’s move into Bitcoin follows a strategic shift outlined earlier this year. In March, the company’s board approved a policy to incorporate Bitcoin as a treasury reserve asset, aiming to diversify its financial holdings. To support this plan, GameStop raised $1.48 billion through convertible notes in April, providing the capital needed to execute its cryptocurrency strategy.

Speculation about GameStop’s cryptocurrency ambitions surfaced in February 2025, when CEO Ryan Cohen shared a photo on X with Michael Saylor, co-founder of MicroStrategy and a well-known Bitcoin advocate, on February 10. The post ignited investor optimism, fueling expectations that GameStop might follow MicroStrategy’s lead in investing in Bitcoin. This positive sentiment persisted as GameStop announced its Bitcoin reserve strategy and secured funding for it, providing sustained bullish momentum for its stock price. From February 10 to May 27, GameStop’s stock rose 41.57%, climbing from $24.73 to $35.01.

At the Bitcoin 2025 conference in Las Vegas, Cohen emphasized Bitcoin’s role in an interview with the CEO of Nakamoto David Bailey, stating, “Bitcoin can be a hedge against global currency devaluation,” aligning GameStop with companies like Strategy that have embraced the asset for treasury diversification.

Market Reaction and Volatility

The Bitcoin purchase announcement initially drove a 2.11% pre-market increase in GameStop’s stock to $35.78 on May 28, but the gains reversed as the market opened, with the stock closing at $31.21, down 10.85% from the previous day’s $35.01, according to Google Finance. This sell-off reflects a “sell-the-news” pattern, where investors, having anticipated the purchase, sold shares to lock in gains. The lack of details in the SEC filing about the timing or average purchase price of Bitcoin added uncertainty, potentially fueling the downturn.

Bitcoin’s Role in GameStop’s Financial Strategy

GameStop’s $512 million Bitcoin investment, based on a price of approximately $108,700 per BTC at the time of disclosure, positions it as a significant corporate holder of the cryptocurrency. The move leverages the company’s robust cash reserves, reported at $4.77 billion following strong Q4 earnings earlier this year. This financial flexibility has allowed GameStop to explore alternative investments without jeopardizing a stretch to its core retail operations.

Broader Institutional Bitcoin Adoption Trends

The acquisition aligns with a growing trend of corporations adopting Bitcoin to preserve value amid inflationary concerns, a strategy pioneered by firms like Strategy, which now holds over 580,250 BTC. According to HODL15Capital, the top 85 companies globally holding Bitcoin currently own over 800,000 BTC, accounting for more than 3.8% of Bitcoin’s total supply of 21 million coins. This figure continues to grow.

Risks and Outlook

Despite the widespread attention generated by GameStop’s Bitcoin acquisition, the subsequent drop in its stock price suggests that some investors remain skeptical about the long-term impact of this strategy on the company’s financial health. While some view the large-scale Bitcoin purchase as a forward-thinking move to diversify assets and hedge against inflation, others caution that tying a significant portion of the company’s treasury to a volatile asset like Bitcoin could expose it to market downturn risks.

Looking ahead, GameStop’s Bitcoin holdings position it as a notable player in the growing corporate adoption of cryptocurrency. Whether this move will bolster its financial resilience or introduce new challenges remains to be seen, but it has undoubtedly placed GameStop at the intersection of retail investing and digital assets.