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GME Stock PLUMMETS 22%: You Won’t Believe What Bitcoin Did to GameStop

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GameStop (<a href="https://bbg-news.com/gme-usd/">GME</a>) Stock Crashes 22% After <a href="https://usdaed.com/btc-usd/">Bitcoin</a> Reserve Plan, Here’s Why

As an analyst, I observed a significant plunge of nearly 22% in GameStop Corp’s (NYSE: GME) stock price on March 27, just two days after the company unveiled its intention to accumulate Bitcoin reserves. This announcement sparked such a surge in trading volumes that they reached levels reminiscent of GameStop’s 2021 short squeeze, ultimately leading the New York Stock Exchange (NYSE) to implement a Short Sale Restriction (SSR).

The Securities Suspension Rule (SSR) applies whenever a stock’s price falls more than 10% from its closing price on the previous day. In light of recent events, GameStop’s stock has fallen by 12%, erasing the gains it had made following the announcement of its Bitcoin reserve plans. The GME stock ended yesterday’s trading session at $22.09.

According to information from TradingView, there was a significant increase in the number of short positions for GameStop (GME), reaching approximately 30.85 million shares within a 24-hour period up until March 27th. This represents an impressive jump of over 234%.

This number is almost identical to figures observed around January 2021, when the stock experienced an extraordinary surge due to a “short squeeze.” This event led to significant losses for those who were short selling and managing hedge funds. The highest volume during that time was approximately 33.26 million shares on January 19th.

In an X post, Malone Wealth president and CEO Kevin Malone commented on GME stock moves.

GameStop Corporation’s stock, symbol GME, saw a staggering 50 times more shares exchanged today compared to last Thursday. This level of increase is extremely unlikely without the practice known as “naked short selling.

— Kevin Malone (@Malone_Wealth) March 27, 2025

GameStop’s Bitcoin Plans

One day following the company’s announcement about setting up a Bitcoin reserve, it was also made clear that they intended to use $1.3 billion from their total cash reserves, which amounted to $4.7 billion, towards purchasing Bitcoins. GameStop further disclosed that their convertible senior notes would be utilized for various corporate purposes such as buying Bitcoins and other general company matters.

According to some analysts, the decrease in the stock’s value is linked to the announcement of the convertible notes offering. On March 27, Han Akamatsu posted that the decline in GameStop’s stock price is due to a similar reason: a strategic drop following the issuance of convertible notes.

I want to share with you my understanding as to why GameStop is losing value today, based on my experience with MSTR:
1. When MSTR issued convertible notes, large investors employed a strategy called convertible arbitrage:
– They purchased the bonds
– Simultaneously, they borrowed and sold short MSTR stock to protect themselves from potential losses (hedging)
– They waited for the bond to be converted into shares of MSTR, which would allow them to cover their short position and make a profit

When MSTR issued bonds that could be converted into its own shares at a later date, some big investors bought those bonds and sold short (borrowed and immediately sold) MSTR’s stock. They did this to protect themselves from potential losses while they waited for the bonds to be converted into MSTR shares, which would enable them to buy back the borrowed shares and make a profit. The same dynamic might be at play with GameStop.

— Han Akamatsu 赤松 (@Han_Akamatsu) March 27, 2025

In addition to GameStop’s shares, Bitcoin’s value is also experiencing a bit of downward push, decreasing by 1.7% today and dipping below the $86,000 mark.

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2025-03-28 16:16

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