Despite the Bitcoin investment, Vincent Liu suggests that a clear strategy beyond just buying crypto is needed for sustained value.
GameStop, the well-known video game retailer, recently raised another $450 million, bringing its total recent fundraising through special convertible notes to $2.7 billion. The company plans to use these funds for its general business needs and to buy more Bitcoin, adding it to the company’s financial reserves.
This $450 million raise is an addition to the $2.25 billion GameStop secured last month. These notes, which are due in 2032, can be turned into GameStop Class A shares for $28.91 per share. This is a 32.5% premium over the stock’s average price as of June 12, when the first offering began. GameStop stated that the money will go towards general business use and investments, including buying Bitcoin to hold on its balance sheet.
However, experts are questioning if simply holding Bitcoin is enough. Vincent Liu, Chief Investment Officer at Kronos Research, believes that while companies are buying Bitcoin to reduce financial risks and find new money, a Bitcoin strategy needs more than just purchases. Liu emphasised that a
Well-planned strategy to protect capital and strengthen liquidity. is vital. Without clear plans and a long-term vision, he stated, such investments are Unlikely to deliver sustained value.
He warned that if it’s seen as just hype, the impact will be small.
GameStop began buying Bitcoin in May, acquiring 4,710 coins for about $500 million from an earlier $1.3 billion note sale. The company is now following a similar path to Michael Saylor’s Strategy, which built large crypto holdings by selling stock and issuing debt. This approach has led to big swings in Strategy’s stock price. GameStop CEO Ryan Cohen has publicly stated that buying Bitcoin is a way to guard against larger economic risks, seeing its fixed supply and decentralised nature as a potential protection.
Shares of GameStop are priced at $23.55, up 0.26% in the last 24 hours. Despite this recent recovery, its price continues a trend of underperformance as investors look towards companies with stronger finances and growth. The decision to buy Bitcoin has not significantly boosted the share price, leading some analysts to doubt the strategy.
On the same day the company announced its new fundraising, it also reported a 17% drop in revenue for the first fiscal quarter, falling to $732.4 million. Demand for digital games is rising, while in-store customer traffic continues to fall, showing that GameStop’s main business of selling physical games and consoles is still struggling.
Despite these concerns, CEO Ryan Cohen is pushing the company in new directions. At a recent meeting, he announced that GameStop is expanding its collectables business, calling trading cards a “Natural extension” of the brand.
He described this area as having high profit margins and being deeply rooted in retail, noting that “Cardboard isn’t” going digital like games. GameStop’s collectables revenue jumped 54% in the first quarter compared to last year, largely driven by sales of Pokémon Trading Cards. A survey by Circana showed that 19% of adults had bought Pokémon cards for themselves in the last six months, often for fun or decoration.
So, GameStop is now investing in both Bitcoin and Pokémon cards. Whether this unique strategy will ultimately succeed remains to be seen. For now, the company holds $2.7 billion in capital, has Bitcoin on its balance sheet, and a CEO who is equally betting on collectables and crypto.
