GameStop venturing into the world of crypto is a wild bet

New York Post - Mar 29th, 2025

GameStop, the original meme stock, took a bold step last week by issuing bonds to invest in cryptocurrency, aiming to extend its streak of defying traditional business odds. The company's management, led by CEO Ryan Cohen, hoped that the move into digital coins, coupled with the favorable stance of the previous Trump administration on crypto, would boost its stock. However, investors perceived this as a sign of desperation, leading to a significant sell-off. GME shares plummeted over 20% on Thursday, exacerbated by market concerns over tariffs and inflation, and continued to drop the following day.

This move underscores the ongoing challenges GameStop faces as it tries to reinvent itself in a changing market landscape where fundamentals are becoming more critical. The company's business model, focused on selling video games in malls, remains largely unchanged despite efforts to stabilize its finances. The issuance of $1.3 billion in convertible debt to fund the crypto venture reflects a risky strategy akin to wild speculation, raising questions about the company's valuation and future prospects. As the stock market becomes increasingly wary of meme stocks, GameStop's situation serves as a cautionary tale of the volatility and speculative nature of such investments.

Bitcoin Cryptocurrency Game Stop Gme Ryan Cohen Meme Stock Investment Strategy Market Sell Off

Story submitted by Fairstory

RATING

5.0

Moderately Fair

Read with skepticism

The article provides an engaging narrative on GameStop's strategic decisions, particularly its investment in Bitcoin and the challenges facing its business model. While the piece is timely and relevant, it lacks detailed evidence and balanced perspectives, which affects its overall accuracy and reliability. The absence of cited sources and transparent methodology diminishes the credibility of the claims made. Despite these weaknesses, the article succeeds in capturing reader interest and provoking discussion on a high-profile topic, making it a valuable contribution to ongoing debates about meme stocks and cryptocurrency investments.

Accuracy

The story contains several claims that reflect ongoing developments in GameStop's business strategy, such as the decision to issue bonds to invest in Bitcoin and the company's financial performance. However, the accuracy of some claims, such as the exact nature of GameStop's profit figures, the number of stores to be closed, and the specific details of the Bitcoin investment strategy, requires further verification. The claim about GameStop's P/E ratio being significantly higher than the S&P average also needs precise data to confirm its accuracy. Overall, while the story captures the essence of GameStop's recent strategic moves, it lacks detailed evidence and specific figures to fully substantiate its claims.

Balance

The story predominantly presents a critical view of GameStop's strategic decisions, particularly focusing on the perceived desperation of the company's Bitcoin investment and the lack of a fundamentally changed business model. While it acknowledges Ryan Cohen's role in stabilizing the company and mentions the backing of dedicated investors, it does not equally explore potential positive outcomes of the new strategy or provide perspectives from GameStop or its supporters. This imbalance may lead to a skewed perception of the company's situation, omitting a comprehensive view of all stakeholder perspectives.

Clarity

The article is written in a clear and engaging style, making it accessible to readers with a general interest in financial markets and meme stocks. The narrative is coherent, with a logical flow that guides the reader through the main points and claims. However, some sections could benefit from more detailed explanations or data to enhance understanding, particularly when discussing financial metrics or strategic decisions.

Source quality

The article does not cite specific sources or provide direct quotes from credible authorities, such as financial analysts or GameStop representatives, to support its claims. The lack of attributed sources reduces the reliability of the information presented. Without references to specific reports, press releases, or expert opinions, the article's assertions are primarily speculative, which affects its credibility and the reader's ability to trust the information fully.

Transparency

The article lacks transparency regarding the sources of its information and the basis for its claims. There is no disclosure of the methodology used to obtain the information or any potential conflicts of interest. The absence of clear attribution or explanation of how conclusions were reached diminishes the transparency of the piece, making it difficult for readers to assess the validity of the arguments presented.