GameStop CEO’s $10M Stock Purchase Keeps Retail Confidence High Amid Bitcoin Pivot

GameStop (GME) shares rose 3% in extended trading on Thursday after CEO Ryan Cohen disclosed that he had raised his stake in the company.

Cohen purchased 500,000 shares for $21.55 in the open market, totaling $10.78 million, according to a securities filing.

Share purchases by top management are typically seen as a vote of confidence for the business.

The move comes shortly after GameStop approved an investment plan that allows it to buy Bitcoin as a treasury asset.

The video games retailer is raising $1.3 billion through convertible notes to fund the purchase, among other initiatives.

Shares of the company plunged 12% last week after see-saw trading over its Bitcoin investment plan and have continued to slide this week.

GME is a well-known “meme stock” — prone to wild swings based on social media chatter and retail investor commentary rather than business fundamentals.

In an approach similar to that of software firm Strategy, formerly known as MicroStrategy, GameStop is likely hoping that its stock will become a proxy for Bitcoin prices (BTC.X) and see potential upward swings while gaining new investors.

Analysts, including Wedbush, think the debt raise may not be popular with investors, given that GameStop has yet to articulate its strategy for Bitcoin investment thoroughly.  

On Stocktwits, retail sentiment dropped slightly to 'bullish' from 'extremely bullish' a day ago, while message volume was high.

An overwhelming 73% of over 1,000 respondents to a Stocktwits poll said they would recommend GME to a friend.

One bullish user said they trusted CEO Cohen was playing the long game and that his patience would pay off.

Shares of GME ended Thursday at $21.10, down 32.7% year to date.

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