GameStop Latest News: GME Stock Price Plunges 22% in a Single Day
On June 12, 2025, GameStop (GME) stock price experienced a cliff-like fall, plummeting 22.45% in a single day to close at $22.14. However, the trading volume surged exceptionally by 657.39%, reaching an astonishing $3.829 billion, ranking 13th on the list of trading volumes for U.S. stocks that day.
The trigger for this sell-off was the company’s announcement of plans to issue $1.75 billion in convertible bonds, which will become the largest convertible bond issuance in the U.S. market in 2025.
The Dual Catalysts of the Big Dump: Convertible Bonds and Disappointing Earnings Reports
- The massive convertible bonds impact market confidence: On June 11, GameStop announced the issuance of $1.75 billion in private convertible notes to institutional investors under Rule 144A, with an additional option to raise $250 million within 13 days after the issuance. This move is interpreted by the market as an aggressive financing strategy, raising investor concerns about equity dilution. Although the company did not specify the use of funds, in conjunction with its recent strategy, the market generally speculates that part of the funds will be used to continue increasing Bitcoin investments.
Weak fundamentals: Q1 revenue fell by 17%. The financial report for the first quarter of fiscal year 2026 released by GameStop the day before the announcement of the convertible bond showed signs of fatigue:
- Revenue was only $732.4 million, a year-on-year decline of 17%, lower than analysts’ expectations of $750 million.
- The hardware and accessories department’s revenue experienced a big dump of about 32%, and physical game sales continue to shrink. Despite achieving profitability for the fourth consecutive quarter through cost reductions (net profit of 44.8 million USD), the downward trend in revenue has not stopped, highlighting the challenges of its business model amid the wave of digitalization in gaming.
Bitcoin Gamble: The Backfire of Transformation Strategies
On May 28, GameStop used $513 million in cash to purchase 4,710 bitcoins, becoming the 13th largest corporate holder of bitcoin globally. This move emulates MicroStrategy’s (MSTR) “bitcoin treasury reserve” model, aiming to reshape the company’s value narrative.
However, the market reaction was cold:
- After the disclosure of Bitcoin holdings, GME’s stock price fell by 19.33%
- Investors questioned its deviation from core business, especially during the period of declining company revenue, when it used huge amounts of capital to bet on cryptocurrencies.
“GameStop investors seem less excited about the retailer’s latest embrace of cryptocurrency,” blockchain media commented, in stark contrast to the surge in stock price after MicroStrategy announced its holdings.
MEME Stock Game: The Rematch Between Retail Leaders and Short-Selling Institutions
GameStop’s stock price is always entwined with key figures and the battle between bulls and bears:
- “Roaring Kitten” Keith Gill’s Position Effect: In May, Gill showcased his holdings on Reddit: 5 million shares of GME stock + 120,000 call options, with a total value exceeding $180 million. The news stimulated GME’s pre-market gains to double, with an intraday peak rise of 75%.
- Old rival Citron returns to the battlefield: Andrew Left, the founder of Citron who exited after losing money shorting GME in 2021, publicly announced: “I shorted after seeing (Gill’s post),” and bluntly stated that GME “is not even a company, but rather a trading tool.”
- Duang Yongping’s options arbitrage strategy: Unlike directly shorting, Duang Yongping sells call options with a strike price of 100 USD, expiring in January 2025 (GME250117C100), betting that the stock price will struggle to maintain a high level for a long time.
Conclusion: Game Station at the Crossroads
Currently, GameStop is trapped in a strategic maze:
- Physical retail shrinkage: Following the closure of nearly 600 stores in the U.S. in 2024, the company announced that it will close a “large number” of stores in 2025.
- Bitcoin betting cools: Cryptocurrency transformation has not gained market acceptance, further exacerbating stock price volatility.
- Convertible bonds increase financial risk: $1.75 billion in debt may dilute shareholders’ equity in future equity conversions.
As of June 12, GME has fallen 29.36% year-to-date, underperforming the S&P 500 index’s increase of 2.7% during the same period. This company, which rose to prominence in financial history due to retail investor frenzy, is facing a more severe issue than just stock price volatility: when the MEME aura fades, is GameStop a company that needs to be profitable, or does it exist merely as a bargaining chip for bulls and bears? The answer may be more complex than the candlestick chart.
