The once legendary meme share GameStop is again in a roller coaster, but this time downhill. Last Thursday, the share lost no less than 25% of its value, after the company revealed a striking plan: a Gamestop Bitcoin (BTC) bond of $ 1.3 billion, intended to purchase a considerable amount of the digital currency.
Such a strategy with open arms was received from other companies. But not here, what’s going on?
Loss of trust
What at first sight sounded like a strategic jump towards digital assets, as the details became clearer, it turned out to be less convincing on closer inspection. Gamestop announced that it would spend a convertible bond of no less than $ 1.3 billion, with an interest rate of 0%. That means that investors only earn something if the share price rises considerably. And that makes many people think.
According to analysts, therefore, many investors are selling, or even shortly going on the share, in the run -up to the issue of these ‘convertibles’. The atmosphere quickly turned from euphoria to caution.
“Many shareholders seem to have little confidence in this move,” says Louis Liu, Chief Investment Officer at Mimesis Capital, in an X Post. And to be honest, that is quite understandable. Why would you pay the greenhouse value of a company more than twice just because it wants to buy Bitcoin? Certainly if you can also just purchase BTC yourself, or a Bitcoin Spot Exchange Traded Fund (ETF).
In the footsteps of Strategy
Gamestop is clearly trying to follow the path of Strategy here (known as micro strategy), the company that caused a furore years ago with its mega large BTC positions. But there is a difference: Strategy is appreciated on the market on less than twice its Bitcoin, while Gamestop is still above average high, and that raises questions.
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Source: https://newsbit.nl/gamestop-aandeel-crasht-met-25-na-bitcoin-plan-wat-is-er-aan-de-hand/
