GameStop Shares Plunge 22% After Debt-Fueled Plan To Buy Bitcoin Sparks Investor Doubts
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. ...