GameStop buys a half billion dollars’ worth of Bitcoin, but investors aren’t impressed—and shares are plummeting

• GameStop says it has purchased roughly half a billion dollars’ worth of Bitcoin. That sent share prices lower as investors shrugged off the latest business strategy. Analysts have questioned why stockholders should support this plan.

GameStop has enacted its latest plan to stay afloat, but even investors in the meme stock are skeptical.

The company, as it announced in March, has shifted its focus to Bitcoin, buying 4,710 of the tokens (worth roughly $500,000) on Wednesday. GameStop announced the purchase in a one-sentence press release on Twitter/X.

Shares fell more than 10% on the news and they didn’t recover in early trading Thursday. Shares plunged another 5% as of 11:40 a.m. ET.

The shift to Bitcoin has divided investors. GameStop has said it plans to buy $1.3 billion worth of the cryptocurrency, which is subject to extreme pricing volatility. The stock fell 23% following that announcement, but is currently trading at a higher price than it was prior to the strategic shift.

The goal of the new investment strategy is to “provide sufficient liquidity to meet the day-to-day financial obligations of the Company, and to optimize investment returns,” the company said in a March SEC filing.

GameStop’s core retail business has been suffering for years. The video game industry has increasingly turned to a digital distribution model, cutting retailers like GameStop out of the sales process. And, since digital copies of games can’t be traded in, that has also hurt the retailer’s used-game business, which was its bread and butter for years. GameStop reported a 28% decrease in sales from 2023 to 2024, falling from $5.3 billion to $3.8 billion.

GameStop has been closing stores and reducing its headcount. Retail investors, though, have buoyed the stock, a move that has baffled market watchers and analysts.

“GameStop is following the MicroStrategy playbook, but MicroStrategy currently trades at less then 2x the value of its Bitcoin holdings,” wrote Wedbush’s Michael Pachter in a note to investors in March. “We find it hard to understand why any investor would be pay more than 2x cash value for the potential for GameStop to convert that cash into Bitcoin, particularly since the same investors can invest in Bitcoin or a Bitcoin ETF themselves. … GameStop has consistently been able to capitalize on the existence of ‘greater fool’ willing to pay more than twice its asset value for its shares—and so far, they’ve been right.”

This story was originally featured on Fortune.com