A new turn toward Bitcoin investment sent GameStop shares sliding on Thursday, as the company announced a $1.75 billion convertible notes offering that could fund further purchases of the cryptocurrency.

Following Strategy

The move, which echoes a strategy adopted by MicroStrategy, has triggered skepticism among investors amid broader concerns about GameStop’s weakening core business.

The company stated that proceeds from the offering would support general corporate purposes, which now include potential crypto investments under its revised investment policy.

That policy saw its first major deployment last month when GameStop acquired 4,710 bitcoins, valued at over $500 million. The market response was immediate and sharp. Shares of GameStop fell over 15% in premarket trading following the news.

That drop came just a day after the stock declined 6% on weaker-than-expected quarterly earnings. GameStop reported a 17% year-over-year revenue decline to $732.4 million in the fiscal first quarter, highlighting the ongoing shift in consumer behavior toward online gaming and digital distribution.

Aggressive Accumulation of Bitcoin

GameStop appears to be taking cues from MicroStrategy, recently renamed Strategy, which has become known for its aggressive accumulation of bitcoin, financed in part through convertible debt.

That approach led to large gains in Strategy’s share price during bitcoin bull runs, though the stock has also experienced extreme volatility. GameStop’s shift toward crypto investment introduces a new layer of

Source: Finance Magnates