GameStop stock drops after surprise Bitcoin purchase announcement
GameStop (GME) shares declined during Wednesday morning trading following the company's announcement that it had acquired 4,710 Bitcoin (BTCUSD).
The company did not disclose when the purchase was made, at what price the Bitcoin was purchased, or whether it was acquired through one or multiple transactions, News.Az reports, citing foreign media.
At its current prices of roughly $108,000, the Bitcoin that GameStop recently purchased is worth north of $500 million.
The retailer added Bitcoin to its official corporate investment policy in March, following months of reports and social media posts fueling speculation that GameStop was considering investing in Bitcoin. After adding the cryptocurrency to its policy, GameStop said it was planning to issue $1.3 billion in convertible bonds for "general corporate purposes," including buying Bitcoin.
In its annual report issued last month, GameStop cautioned investors that it would be subject to the risks that come with investing in Bitcoin and cryptocurrency at large, namely volatile price swings and potential regulatory shifts. The company did not disclose any Bitcoin ownership at the time.
After rising in premarket trading following the news, GameStop shares were down 10% in Wednesday morning trading while the price of Bitcoin was down 1%.
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