GameStop Wins Over Most Retail Traders With Bitcoin Gambit, Poll Shows — Analyst Says Plans Could ‘Fall Flat
Wedbush said GameStop’s $1.3 billion debt offering might not get enough investor participation.
FollowMost retail investors have turned more bullish on GameStop Corp (GME) after its plan to borrow $1.3 billion to buy Bitcoin, even as shares plummeted and prompted caution from at least one Wall Street analyst.
According to a Stocktwits poll, nearly 50% of some 3,300 retail investors that have cast their votes so far said they are "more bullish" after the company detailed the plan.
Twenty-two percent said they are "more bearish", and 13% said they "feel the same as before". The poll is open for another nine hours.
The sentiment is, however, not consistent with the view among some Wall Street analysts.
According to The Fly, Wedbush said GameStop's debt offering might "fall flat" partly because a large portion of the company's investor base would likely be unable to qualify under the "qualified" investor requirement.
GME is a well-known meme stock, an equity that is prone to wide swings in its price due to retail enthusiasm and social media chatter rather than business fundamentals.
As such, the stock has sizable retail shareholding.
In its note, Wedbush argued that investors would find the bond — which has a zero coupon — unattractive.
However, the research firm noted that despite "a complete lack of articulated strategy," GameStop's financial maneuvering has worked in the past, and the company has consistently found new investors.
The brokerage maintained its 'underperform' rating on the stock and said it would revisit its $11.50 price target once the offering concludes.
On Stocktwits, the retail sentiment was 'extremely bullish,' and message volume was 'extremely high.'
One of the poll respondents commented that GME's move could have the "potential for their own coin."
“Buying BTC is bullish IMO — cash is good, but BTC has outperformed long-term,” said another, who said that GameStop’s plan mirrors Michael Saylor’s Strategy playbook.
GME shares gained initially on Wednesday but fell 22% the next day after the company announced the $1.3 billion bond offering.
Shares closed at $22.09 on Thursday and are down nearly 30% year to date.
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