GameStop GME Buys $513M in Bitcoin, Shares Gain 4% in Pre-Market

Over the following week, the stock plummeted, trading at a little over $50 per share just a week after reaching that all-time stratospheric high. The meme stock mania became something of a pop culture moment, too, making household names out of traders like Roaring Kitty. There was even a 2023 feature film, “Dumb Money,” based on their exploits. GameStop customers have little interaction with employees, with the company website providing information on new releases, game availability, and store locations. “The reason why that’s important is if there’s people betting the stock is going to go down, and if they’re wrong and the stock price gets pushed up, then what will happen is eventually they will capitulate and they will give up,” Moallemi said.

January 2021 short squeeze

• Due to the size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, GameStop is rated Zacks Rank #3 (Hold).
• And on the morning of the 28th, it skyrocketed to a staggering peak of $483.
• The company generates revenue from the sale of its products to consumers, whether that be through its website, affiliate program, or bricks-and-mortar stores.
• If this momentum continues, discussions of bitcoin’s future may finally move beyond short-term concern over its inherent volatility, and instead focus on its future as a foundational asset within the global economy.”
• It prompted a wave of trading restrictions on platforms like Robinhood, sparking debates about market fairness and regulatory oversight.

In addition to its retail operations, GameStop offers trade-in services where customers can exchange their used video games, consoles, and accessories for store credit or cash. This trade-in model has been a significant part of GameStop’s business, allowing customers to offset the cost of new purchases by trading in their old gaming items. GameStop is an American brick-and-mortar retailer that specialises in video games, consumer electronics and gaming merchandise. It was widely deemed a company in declining health—indeed, its mere existence as a physical shop was viewed on Wall Street as being decidedly outdated, and its business model was hurtling towards failure. This bearish view was only further reinforced by GameStop’s share price, which had been on a long-term downtrend—from just below $50 at the start of 2014 to a mere $3 about a year ago.

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Many new participants were drawn into the stock market by the meme stock phenomenon—especially younger investors using mobile apps such as Robinhood. Regulators and lawmakers increased their scrutiny of meme stocks and short selling practices. And GameStop itself leveraged its newfound attention and influx of capital to shift its focus towards e-commerce and digital ventures such as NFTs—with mixed results. GameStop said Wednesday it has officially bought 4,710 bitcoins, worth more than half a billion dollars, as the video game retailer began its crypto purchasing plan in a similar move made famous by MicroStrategy. Digital Transformation – The rapid growth of digital game downloads and online marketplaces has posed a substantial challenge to GameStop’s traditional business model, which heavily relies on physical game sales. As more gamers choose to download games directly to their consoles or PCs, GameStop’s sales of physical copies have declined.

• GameStop is following in the footsteps of software company MicroStrategy, now known as Strategy, which bought billions of dollars worth of bitcoin in recent years to become the largest corporate holder of the flagship cryptocurrency.
• The coordinated rise in GameStop and AMC shares on Tuesday comes as no surprise to traders familiar with their trading history.
• Partnerships and Exclusive Content – GameStop has formed partnerships with game publishers and hardware manufacturers to offer exclusive content, bundles, and early access to highly anticipated releases.

Zacks may license the Zacks Mutual Fund rating provided herein to third parties, including but not limited to the issuer. The company confirmed the rumors during its fourth-quarter earnings release in March by updating its investment policy to include Bitcoin holdings. While revenue fell short at $1.28 billion, earnings per share beat expectations and net income more than doubled. The company also ended the quarter with $4.78 billion in cash and equivalents, putting it in a strong position to execute on its new digital asset strategy. On the 29th, data from fintech company S3 Partners showed that short-selling hedge funds had suffered a year-to-date market-to-market loss in GameStop of $19.75 billion. In the week following GameStop’s reaching its peak share price, around $36 billion of value was wiped off of its value, as well as that of four other “meme” stocks that were being traded in a similar fashion.

GameStop must adapt to these changes to stay relevant and competitive. Community Engagement – The company actively engages with the gaming community through various initiatives, including gaming events, online forums, and partnerships with gaming influencers. Building a sense of community around its brand has fostered customer loyalty and word-of-mouth promotion. GameStop is trending on various social platforms as traders highlight technical momentum paired with continued short selling in the name.

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“We expect that eventually GameStop stock price will come down and some people will lose money when that happens for sure,” he said. “And my fear is that they’ll view the stock market as being rigged and not being fair, and that they won’t invest in the stock market.” In early December, GameStop reported that net sales plummeted in the third quarter of its fiscal year 2020, down more than 30% compared to the same time period in 2019. The retailer attributed this drop in sales to a number of reasons, including an “11% reduction in the store base.” The now-legendary r/wallstreetbets page was started in 2012, according to a Wall Street Journal interview with one of the founders.

“We really need to make sure that our financial markets are functioning properly, efficiently, and that investors are protected.” After a drama-filled week that gripped the nation, the entertainment industry outlet Deadline reported that the saga was already being turned into a movie that was being produced by Tyler and Cameron Winklevoss (of “The Social Network” fame). In the same earnings report, however, the company highlighted a bright spot that e-commerce sales had spiked considerably — increasing some 257% year-over-year. The stock market drama has been called a “David and Goliath” battle.

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The demand raised its share price massively, which nobody saw coming, and everyone who had banked on it dropping in value had to buy their shares back. But huge numbers of people in the wallstreetbets Reddit forum swapped tips and bought shares in GameStop. J Acquired Geeknet, Inc. (“ThinkGeek”), 8 price action secrets every trader should know about a United States–based online and wholesale Pop Culture retailer.

A few days later, Tyler Winklevoss tweeted a link to reports about the film and said that when the movie comes out he and his brother will be renting AMC theaters (another popular stock within r/wallstreetbets) for “premiere parties.” Left of Citron Research made the announcement in a YouTube video, saying Citron Capital let go of the majority of their bets that GameStop stock would fall and took a “100%” loss in doing so. “In this sort of Wall Street bets culture, people take screenshots of how much money they’ve made or lost to kind of show off,” he said. “And as they sort of advertised that, people started piling into the trade and the momentum built.” “So it started out as kind of a little bit of a value investing story,” he added.

F Acquired Free Record Shop Norway AS (“Free Record Shop”), a Norway-based record store retailer operating 49 stores. Since then, GameStop has traded as a “meme stock,” with CMC Markets Review its price fluctuations tied to social media hype. When Roaring Kitty posted a vague meme to social media after years of silence, GME more than doubled in price from market close on Friday to the Monday open—a massive surge in demand that prompted Nasdaq to halt trading nine times in one morning. Video game retailer GameStop found itself at the heart of a stock market phenomenon in 2021, when Redditors who believed its stock was undervalued fought in the markets against hedge fund short sellers.

But what has been particularly noteworthy about the GameStop episode—and certainly in contrast to the Volkswagen short squeeze—is that the stock surge was mostly driven by many small traders rather than a few big ones. The fact that its stock price, despite crashing back down to earth around a week after hitting its peak, has once again surged over $200 in recent days also suggests that the stock’s wild rollercoaster ride is not quite over just yet. GameStop operates a mass-market business model with no significant variation between customer segments. That is, the company markets itself to any consumer seeking video games and related products. GameStop is an American retailer of video games, consumer electronics, and gaming merchandise. The company was founded in 1984 by Leonard Riggio, Daniel DeMatteo, and Richard Fontaine.

At this point, the frenzy was only beginning—by January 20, GameStop’s price had risen to almost $40 per share—a doubling of its price in only three weeks. And on the morning of the 28th, it skyrocketed to a staggering peak of $483. As the tug-of-war between the everyday investors and hedge funds heated up and support grew for GameStop on r/wallstreetbets, the stock skyrocketed more than 50% in the trading session on Jan. 22. During after hours and pre-market trading that weekend, the GameStop continued to climb. The shares of GME rose more than 4% in U.S. pre-market trading on the news, while bitcoin price remained subdued around $108,000.

Additionally, GameStop’s efforts to build a stronger online presence and enhance customer engagement have aimed to remain competitive in the face of these substitutes. While the threat of new entrants may be relatively low, GameStop still faces challenges related to its business model, such as the shift to digital gaming and changing consumer preferences. Therefore, the company needs to continue adapting and innovating to remain competitive in the evolving gaming landscape. Evolving Gaming Ecosystem – The gaming industry continues to evolve with new hardware, software, and business models.

In March 2023, GameStop decided to leave Ireland after another loss making year accumulated its losses to €45.5 million. Our chief editor shares analysis and bitfinex review picks of the week’s biggest news every Saturday. Shares of the Dallas, Texas-based company were 4.4 per cent higher in pre-market trading. The Grapevine, Texas-based company revealed its plans to pursue a bitcoin treasury strategy in March, offering $1.3 billion in debt to raise the funds for BTC acquisition. GameStop announced the purchase on X on Wednesday but did not offer further details about when the BTC were acquired or the price paid.

People who buy and sell stocks often bet on which companies won’t do well in the future. The sort of thing you’d find between a doughnut shop and a makeup retailer in an American mall.

However, they also pointed to the pre-owned games segment as a major part of its success.142143144 GameStop’s Australian division has been the only profitable segment of the global GameStop business for the 2020, 2021 and 2022 fiscal years. The company reported profits of US$9.4 million, US$52.2 million and US$30.6 million for each fiscal year respectively. GameStop Corp. is an American video game, consumer electronics, and gaming merchandise retailer,1 headquartered in Grapevine, Texas (a suburb of Dallas).

On Tuesday, SharpLink Gaming, an online gambling marketer, raised $425 million to buy Ethereum for its treasury, with Consensys CEO and Ethereum co-founder Joseph Lubin joining the company’s board of directors. The bitcoin price has surged to a fresh all-time high this month, triggering a flood of bullish … In March, Kip Herriage a GameStop investor with Vertical Research Advisory told CNBC he believes GameStop’s stock will rocket to $100 per share, topping its meme stock craze peak of around $80, if it goes all in on bitcoin. Bitcoin has surged in recent weeks, topping the previous bitcoin price all-time high, with Tesla billionaire Elon Musk quietly confirming what could be a bitcoin and crypto game-changer. No investment decision can be efficient without considering a stock’s valuation.