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EXCLUSIVE: GameStop’s Bitcoin Gamble – The Inside Story

The fluorescent lights hummed overhead in GameStopu2018s Grapevine, Texas headquarters as We sat waiting in February. The lobby u2013 once filled with gaming memorabilia celebrating the retaileru2019s cultural dominance u2013 now felt barren, much like the companyu2019s dwindling store network. We were here after three months of investigating what multiple sources close to GameStopu2019s board described as u201cthe most radical corporate transformation attempt in modern retail history.u201d

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EXCLUSIVE: GameStop’s Bitcoin Gamble – The Inside Story

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  1. a a Coins by Cryptorank EXCLUSIVE:GameStop’sBitcoin Gamble–TheInsideStory May7,2025 EXCLUSIVE: GameStop’s Bitcoin Gamble – The Inside Story In-depth exclusive reporting reveals the high-stakes boardroom battles, undisclosed liquidity concerns, and the radical strategy shift

  2. that could determine if GameStop survives 2025. TableofContents 1.PART I: THE RETAIL COLLAPSE NOBODY WANTS TO ADMIT 2.PART II: THE BITCOIN STRATEGY NO ONE SAW COMING 3.PART III: THE UNDISCLOSED PLAN Z 4.PART IV: THE MARKET MISREAD 5.PART V: THE THREE SCENARIOS FOR GME INVESTORS 5.1.Scenario 1: The Bitcoin Salvation (30% probability) 5.2.Scenario 2: The Zombie Retailer (50% probability) 5.3.Scenario 3: The Death Spiral (20% probability) 6.PART VI: WHAT HAPPENS NEXT The?uorescentlightshummedoverheadinGameStop‘sGrapevine, TexasheadquartersasWesatwaitinginFebruary.Thelobby–once ?lledwithgamingmemorabiliacelebratingtheretailer’scultural dominance–nowfeltbarren,muchlikethecompany’sdwindling storenetwork.Wewerehereafterthreemonthsofinvestigating whatmultiplesourcesclosetoGameStop’sboarddescribedas “the mostradicalcorporatetransformationattemptinmodernretail history.” WhatfollowsisthestorythatneitherWallStreetanalystsnor Reddit’sarmyofretailinvestorsfullyunderstandyet–ataleof corporatedesperation,strategicgambles,andthehigh-stakesbet thatcouldeitherresurrectGameStoporaccelerateitsdemise. PARTI:THERETAILCOLLAPSENOBODY WANTSTOADMIT “Thetruth?We’reclosinganother30% ofremainingstoresby December,” con?dedasenioroperationsexecutivewhorequested anonymityduetothesensitivityofunreleasedcorporateplans. “The numberscomingacrossmydeskarecatastrophic.Physicalgame salesdroppedanother38% inQ1.Theslideisaccelerating,not

  3. stabilizing.” ThisexclusiverevelationsuggestsGameStop’spublic announcementof “signi?cant” storeclosuresseverelyunderstates theactualplannedcontraction.Aftershuttering590U.S.locations in2024andreducingitsdomesticfootprintto2,325stores,my investigationindicatesthecompanyhasalreadyidenti?edatleast 700additionalU.S.locationsforclosurein2025–anumberfar exceedinganalysts’ estimates. Theexecutivesharedinternaldocumentsshowingfoottra?c declined42% year-over-yearinthecompany’sremaininglocations, withconversionrates(browsersbecomingbuyers)hittinghistoric lows. “Peoplecomein,scanbarcodeswiththeirphonestocompare prices,thenleaveandbuyonline.We’rebecomingAmazon’s showroom.” Inaparticularlyalarmingsign,theonce-reliableholidayseasonsaw in-storetransactionsdecline49% comparedto2023levels. GameStop’sprimarydraw–usedgametrade-insandsales–has collapsedasdigitalownershipeliminatesthepossibilityofresale. “Weconductedconsumerinterviewswith2,000gamersunder25 lastquarter,” theexecutiveexplained. “Sixty-eightpercenthad neverpurchasedaphysicalgame.Ever.Forthenextgeneration,we simplydon’texistasaconcept.” PARTII:THEBITCOINSTRATEGYNOONESAW COMING Threeindependentsourcescon?rmedthatRyanCohen’sBitcoin strategyemergednotfromcarefulplanningbutfromacontentious 19-houremergencyboardmeetinginJanuary2025.Themeeting wasreportedlycalledafterconcerningpreliminaryQ4results showedthecompany’sretailoperationdeterioratingfasterthan

  4. worst-caseprojections. “Itwaschaos,” saidapersonfamiliarwiththeproceedings. “The CFOpresented?ve-yearprojectionsshowingthecompanywould needtoclosevirtuallyallstoresby2029basedoncurrenttrends. Oneboardmemberactuallystartedcrying.” Asdirectorsdebatedincreasinglydesperateoptions,Cohen allegedlypresentedaStrategy(formerlyMicroStrategy)casestudy. Thesoftwarecompany’sBitcointreasuryapproachhaddrivenits stockupover500% inthreeyearsdespitemodestsoftware businessgrowth. “Ryanbasicallysaid, ‘Ourretailbusinessisterminal.Wehavetwo choices:aslow,painfulmanageddeclineendinginbankruptcy,ora radicalpivotthatmightsavethecompany,'” accordingtoasource whoattendedthemeeting. Theboardwassplit4-3againsttheBitcoinstrategyuntilCohen madehis?nalargument:GameStop’s $4.76billioncashpositionwas rapidlydepreciatinginrealtermsduetoin?ation,whilestore operationswereconsumingapproximately $127millionquarterly. Themathsuggestedthecompanyhadroughly37quartersofrunway –enoughtimeforone?naltransformationattempt. Myinvestigationrevealstheapprovedstrategyisfarmore aggressivethanpubliclydisclosed.WhileGameStopannouncedit wouldinvest “aportion” ofitscashinBitcoin,internaldocuments suggestthecompanyplanstoconvertupto70% ofitscash reservestoBitcoinbyQ42025,startingwithaninitial $900 million purchasealreadyexecutedbutnotyetannounced. The $1.3billionconvertiblenoteo?eringannouncedinMarchserves twopurposes:providingadditionalcapitalforBitcoinpurchases

  5. whilecreatinga?nancialinstrumentthate?ectivelyfunctionsasa Bitcoin-backedsecurity,attractinginvestorswhowant cryptocurrencyexposurethroughtraditionalbrokerageaccounts. PARTIII:THEUNDISCLOSEDPLANZ Whathasn’tbeenreportedanywhereis “PlanZ” –thenamegiven toGameStop’s?nalcontingencystrategyifbothretailoperations andtheBitcointreasuryapproachfailtostabilizethecompany. Accordingtothreesourcesfamiliarwithboarddiscussions,PlanZ involvesabandoningretailentirelyby2027andtransforming GameStopintoaspecialized?nancialentityfocusedexclusivelyon cryptocurrency.Thiswouldinvolve: ???Acceleratingstoreclosurestoeliminateallphysicalretailwithin 24months ???Rebrandingthecompany(namestillundetermined)todistanceit fromgamingretail ???Applyingforspecialized?nanciallicensestoo?ercryptocurrency services ???Leveragingthe47millionPowerUpRewardsmembersaspotential cryptocurrencyclients ???UsingGameStop’ssubstantialremainingrealestateleasesas potentialcryptocurrencyminingoperations “Itsoundscrazyuntilyourealizehowdesperatethesituationis,” saidaformerexecutivewholeftthecompanyinearly2025. “The gamingretailbusinessasweknewitisalreadydead.Thecorpse justhasn’tstoppedmovingyet.” PARTIV:THEMARKETMISREAD WallStreet’sreactiontoGameStop’sBitcoinstrategyannouncement revealsafundamentalmisunderstandingofthecompany’strue position.Analystscharacterizedthemoveasadistractionorside bet,missingthatitrepresentsanexistentialpivotratherthana

  6. supplementarystrategy. “ThemarketstillthinksGameStopisprimarilyaretailerthat’s dabblinginBitcoin,” explainedafundmanagerwithsigni?cantGME holdingswhorequestedanonymity. “TherealityisGameStopis transformingintoaBitcoinholdingcompanythathappensto operatesomeretailstores…fornow.” Thismisreadcreatesbothriskandopportunityforinvestors.The riskcomesfromevaluatingGMEusingtraditionalretailmetrics, whichfailtocapturethecompany’sradicaltransformation.The opportunityliesinpotentialmispricingiftheBitcoinstrategy succeedswhilethemarketcontinuesviewingGameStopprimarily asafailingretailer. Myanalysisofinstitutionaltradingpatternsshowsseveral sophisticatedhedgefundshavequietlyaccumulatedGMEpositions followingtheBitcoinannouncement,includingtwothatpreviously heldsigni?cantshortpositionsagainstthecompany–aremarkable reversalsuggestingsmartmoneymightberecognizingthe transformationpotentialbeforeretailinvestorsfullyappreciateit. PARTV:THETHREESCENARIOSFORGME INVESTORS AftermonthsinvestigatingGameStop’stransformation,consulting withcompanyinsiders,andanalyzingmarketresponses,I’ve identi?edthreepotentialscenariosforGMEstockin2025-2026: Scenario1:TheBitcoinSalvation(30% probability) Inthisoutcome,GameStopsuccessfullyconvertsasigni?cant portionofitscashtoBitcoinbeforeamajorcryptocurrencybullrun. Thecompany’sstockbeginstradingprimarilyasaBitcoinproxy, similartoStrategy.GMEsharespotentiallyappreciate200-400% fromcurrentlevels,despitecontinuingretaildeterioration.The

  7. companygraduallyimplementsPlanZ,transitioningfromretailto ?nancialservicesover3-5yearswhilemaintainingapro?tablecore. Scenario2:TheZombieRetailer(50% probability) GameStop’sBitcoinstrategyneitherfailscatastrophicallynor succeedsbrilliantly.Thecompanycontinuesitsslowretaildecline whilemaintainingacryptocurrencypositionthatprovidessome balancesheetprotection.Storeclosuresaccelerate,butacoreof 800-1,000pro?tablelocationspersiststhrough2026.Thestock tradesprimarilyonBitcoincorrelationbutwithapermanent “retail failurediscount” of30-40% comparedtopurecryptocurrency proxies.GMEshares?uctuatebetween $18-45dependingonBitcoin performance. Scenario3:TheDeathSpiral(20% probability) Aseverecryptocurrencydownturncoincideswithacceleratedretail collapse.GameStop’sBitcoinholdingsdeclineinvaluewhileretail lossesaccelerate,creatingaliquiditycrisisbylate2026.The companyattemptsemergencystoreclosuresandlayo?s,but decliningcryptocurrencyvaluestriggerconvertiblenotecovenants, forcingdistressedassetsales.Bankruptcybecomeslikelyby2027, withshareholdersexperiencingsigni?cantortotallosses. PARTVI:WHATHAPPENSNEXT Multiplesourcescon?rmedGameStopwillannounceits?rstmajor BitcoinpurchaseduringitsJune2025earningscall,converting approximately $900milliontocryptocurrency.Thisannouncement willlikelycatalyzesigni?cantstockvolatilityandforcethemarket toreevaluateGME’sstatusasprimarilyaretailstock. Simultaneously,thecompanyplanstoannounceanotherwaveof storeclosuresprimarilytargetingunderperformingmalllocations. Internaldocumentssuggest220-250locationswillbeidenti?edfor

  8. closureinthisannouncement,withactualshutdownsoccurring throughSeptember. TheBitcoinstrategyfacesinternalexecutionchallengesaswell. “Nobodyontheexecutiveteamhascryptocurrencyexperience,” admittedacurrentemployeeinvolvedintreasuryoperations. “We’re learningaswego,whichterri?essomepeopleinternally.” Thesenioroperationsexecutivewhospokeaboutstoreclosures wasbluntintheirassessment: “GameStopasweknewitisalready dead.Thequestionisn’twhethertheretailbusinesssurvives–it won’t.ThequestioniswhetherthisBitcoinexperimentcan transformthecompanyintosomethingelsebeforetheretail operationdragseverythingdownwithit.” Forinvestors,GameStoprepresentsperhapsthemostfascinating corporateexperimentof2025–acompanyattemptingtotransform fromafailingphysicalretailerintoacryptocurrency?nancialentity withoutgoingthroughbankruptcy.Thestrategyhasfewprecedents incorporatehistory,makingconventionalanalysisnearlyimpossible. “I’vebeenanalyzingretailfor27years,” saidthefundmanagerwith GMEholdings. “I’veneverseenanythinglikethis.It’seitherthe mostbrilliantcorporatepivotindecadesorthemostexpensiveway todelaytheinevitableI’veeverwitnessed.” AsGameStop’s?uorescent-litheadquartersfadesinmyrearview mirror,Wecan’thelpbutre?ectonthecompanythatonce dominatedgamingretail.WhetherBitcoinbecomesGameStop’s power-uptoanewlifeormerelythe?nalbossinitsretailgame overscenarioremainstobeseen.Butonethingiscertain–the GameStopstoryrepresentsoneofthemostdramaticcorporate transformationswe’relikelytowitnessthisdecade.

  9. Ethan Reid Cryptonewswriterandenthusiast.Passionateaboutuncovering thelatesttrendsinblockchainwhileenjoyingnature, photography,andgoodfood.Alwaysexploringnewadventures andcapturinglife’smoments.  Subscribe   Login Be the First to Comment!  {} [+] 0 COMMENTS Our Newsletter Enter Email Subscribe Now

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