GameStop Shares Plunge 22% As Analysts Question Bitcoin Buy

GameStop (GME) shares slumped 22% after the company unveiled plans to buy Bitcoin (BTC) using proceeds from a $1.3 billion convertible debt offering, sparking skepticism from analysts.

The plunge wiped $3 billion off the company’s market capitalization, according to Google Finance data as of 2:14 a.m. EST.

GameStop had surged 12% after the company announced its Bitcoin investment plan on March 25, but the rally reversed yesterday amid details of its debt issuance plan and as analysts began questioning the rationale behind the strategy.

Analysts Question GameStop’s Business Model

Brent Kenwell, a US investment analyst at eToro, said investors are questioning the company’s business model. 

“If Bitcoin is going to be the pivot, where does that leave everything else?” he said in an interview with Reuters yesterday.

With investors unsure of GameStop’s future direction, Wedbush analyst Michael Pachter maintains his underperform rating for GME.

“GameStop’s share price will drift lower prior to the issuance of the convert, particularly given that a convert investor will receive a zero coupon and will be required to have faith that the GameStop meme phenomenon will persist for another five years,” he said.  

Bitcoin critic Peter Schiff also shared his take on GameStop’s recent decision to buy BTC.

“Gambling on companies buying Bitcoin is not a good investment strategy,” he said in a March 27 X post. 

$GME has lost all of yesterday’s Bitcoin-inspired 15% gain. Shares are now down 2% over the two days combined. Now that all the fools have already rushed in, smarter investors are selling as they realize that wasting cash buying Bitcoin is not a viable long-term business model.

— Peter Schiff (@PeterSchiff) March 27, 2025

“Now that all the fools have already rushed in, smarter investors are selling as they realize that wasting cash buying Bitcoin is not a viable long-term business model.”

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