Latest news with #MichaelPachter
Time of India
12-06-2025
- Business
- Time of India
GameStop shares plunge as company eyes Bitcoin with new bond offering — investors left scratching heads
GameStop shares fell sharply on Thursday after the company announced a plan to raise $1.75 billion by selling convertible bonds. The money from these bonds will be used for general business purposes, including investments and possible acquisitions, as per reports. Part of GameStop's investment plan is to add cryptocurrencies like Bitcoin to its assets. Last month, GameStop already bought 4,710 bitcoins, worth more than $500 million. After the bond plan was announced, GameStop's stock dropped more than 15% on Thursday, June 12, according to the report by CNBC. GameStop is copying software company MicroStrategy, which bought billions of dollars of bitcoin and is now the biggest corporate bitcoin holder. MicroStrategy's stock rose fast but also went through big ups and downs because of its bitcoin bets. MicroStrategy used similar methods like convertible debt to fund its bitcoin buys. GameStop's CEO, Ryan Cohen, said they want to buy bitcoin because it might protect the company from big economic risks. Bitcoin has a fixed supply and is decentralized, which makes it a possible hedge against some problems, as stated in the report by CNBC. GameStop's sales drop GameStop's business is still mainly a physical store retailer, but they reported lower sales for the first quarter recently. Their revenue dropped 17% compared to last year, falling to $732.4 million. After the earnings report, the stock fell 5% on Wednesday, June 11, before the bond news. Live Events Investors and Wall Street are unsure if GameStop can do as well as MicroStrategy with bitcoin investments. Michael Pachter, a Wedbush analyst, said GameStop's stock is mostly driven by 'greater fools', as mentioned in the report by CNBC. Pachter thinks the bitcoin buying plan does not make much sense because the company's stock is already priced at 2.4 times its cash value. He doubts that turning more cash into bitcoin probably won't make the stock price go up even more, as per reports. FAQs Q1. Why did GameStop shares fall recently? Shares fell because investors are unsure about the company's plan to buy more bitcoin using bond money. Q2. What is GameStop's new investment plan? GameStop wants to raise money by selling bonds and use it partly to buy more bitcoin. Economic Times WhatsApp channel )
Yahoo
12-06-2025
- Business
- Yahoo
Why Shares of GameStop Are Tanking Today
GameStop announced the company is raising more capital through convertible notes. The company appears to be following MicroStrategy with plans to start purchasing Bitcoin. The meme stock has struggled to find direction in its core video game business. 10 stocks we like better than GameStop › Shares of the video game retailer GameStop (NYSE: GME) had tanked roughly 19%, as of 10:18 a.m. ET today. The company announced plans to issue $1.75 billion in convertible notes for "general corporate purposes, including making investments in a manner consistent with GameStop's Investment Policy and potential acquisitions." While GameStop in its press release did not specifically say that it would use the proceeds of the offering to buy more Bitcoin, the world's largest cryptocurrency, many suspect this is the plan and GameStop's investment policy now includes purchasing more Bitcoin. The company earlier this year raised capital through convertible notes. In late May, GameStop then purchased over $500 million worth of Bitcoin. GameStop appears to be following in the footsteps of MicroStrategy, now doing business as Strategy. In 2020, MicroStrategy began purchasing tons of Bitcoin and the stock has generated tremendous returns since. Strategy now regularly taps the capital markets to raise funding that it can use to then buy more Bitcoin. GameStop was one of the original meme stocks in the craze that captivated markets in 2020 and 2021. However, the company's core business is still struggling. In the first quarter of 2025, GameStop reported nearly $45 million in profits, a significant year-over-year improvement, but revenue plunged 17%. The company still doesn't seem to have a sustainable long-term strategy, and as Wedbush analyst Michael Pachter recently said in a research note, the stock still trades at a higher premium to its cash than MicroStrategy trades to its Bitcoin holdings. Buying more Bitcoin may work if the price of Bitcoin keeps moving higher, but it also could lead to greater risk and volatility. Personally, if you like Bitcoin, I'd recommend just buying the asset itself and avoiding GameStop. Before you buy stock in GameStop, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and GameStop wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $657,871!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $875,479!* Now, it's worth noting Stock Advisor's total average return is 998% — a market-crushing outperformance compared to 174% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 9, 2025 Why Shares of GameStop Are Tanking Today was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
CNBC
11-06-2025
- Business
- CNBC
GameStop share valuation is still just relying on 'greater fools' theory, says Wedbush
GameStop 's share valuation is dependent on speculation in overvalued assets because the company's turnaround strategy for its underlying video game business remains murky, according to Wedbush analyst Michael Pachter. "Despite a complete lack of a clear strategy, GameStop has consistently capitalized on the existence of 'greater fools' willing to pay more than twice its asset value for its shares — and so far, they've been correct," Pachter said in a note out Wednesday to clients. The brick-and-mortar retailer reported a decline in first-quarter revenue on Tuesday as demand for online gaming rose. GameStop recently bought 4,710 bitcoins , worth more than half a billion dollars, as the firm began a crypto purchasing plan similar to one made famous by MicroStrategy . GME YTD mountain GameStop shares in 2025. However, the Wedbush analyst believes the bitcoin buying strategy makes little sense from a fundamental business standpoint. "It is difficult to understand why any investor would be willing to pay more than 2x cash value for the possibility of GameStop converting more of its cash into Bitcoin, especially since these investors could invest in Bitcoin or a Bitcoin ETF themselves," Pachter said. "The company already trades at 2.4x cash, making it unlikely that converting more cash to crypto will drive an even greater premium." Gamestop CEO Ryan Cohen recently said GameStop's decision to buy bitcoin is driven by macroeconomic concerns, saying the digital coin, with its fixed supply and decentralized nature, could serve as protection against risks. The analyst reiterated Wedbush's underperform rating on GameStop and a 12-month price target of $13.50, or 55% below Tuesday's close at $30.15. Pachter said his target comprises about $12.50 a share in cash and a going-concern value of $1 a share. "GME shares trade at a level that overlooks the many challenges ahead," he said.
Bloomberg
10-06-2025
- Business
- Bloomberg
Wedbush's Pachter Weighs In on the Video Game Industry
Michael Pachter, Managing Director, Equity Research, Wedbush Securities, speaks with Alix Steel and Romaine Bostick about the AI in the video game industry. (Source: Bloomberg)
CNBC
10-06-2025
- Business
- CNBC
Why the Switch 2 is so important for Nintendo
Nintendo just released the Switch 2, its first new game console in eight years. The original Switch was wildly popular, selling 15 million units in its first year, more than any prior Nintendo console. The company says its was the second most successful console in its history. The Switch also beat out the competition, topping consoles from Microsoft and Sony in first-year sales. Overall, it was only surpassed by the PlayStation 2, the best-selling console of all time. "The Switch replaced both the historic Nintendo console and the historic Nintendo handheld," says Michael Pachter, managing director at Wedbush Securities. "They've merged those two audiences, and the handheld audience got a massive trade up, and the console audience got a zero trade down." While Nintendo systems have often introduced bold new features, like Wii's motion controls or the DS' touch screen, the Switch 2 may be the company's biggest bet yet: that consumers want more of the same. When the original Switch was released in 2017, it met the quality gamers expected from a home console on the go. The second iteration builds off the success of the innovative device, with a bigger screen, improved performance and a higher price tag at $450. Still, the Switch 2 sold out within minutes of pre-orders opening up. And fans lined up for hours ahead of the midnight release at Nintendo stores. The company says it expects to sell 15 million units of the new console in its first year. "They're probably not going to be in a position to meet initial demand," said Clay Griffin, an analyst at MoffettNathanson. "I do think that they'll be able to have success even at this higher price point…there's enough demand that they should be fine." When asked what makes the Switch 2 a worthwhile upgrade, Nintendo of America President Doug Bowser told CNBC it's about creating the next generation of gaming platforms that enhances the overall gameplay for consumers. "With Switch 2, we've taken the things you know and love about Nintendo Switch, but then added very powerful gameplay features and social features," he said. Watch the video as CNBC's Steve Kovach interviews the Nintendo of America President Doug Bowser and explores what's next for the gaming giant.
