TLDR
- The volume of GameStop shares sold short surged dramatically by 234%, reaching a total of 30.85 million.
- Due to GameStop's stock dropping by 22%, the NYSE had to implement a Short Sale Restriction.
- GameStop made a public statement about their intentions to procure Bitcoin with funds obtained from a $1.3 billion convertible notes issuance.
- The current short volume is approaching the levels experienced during the incredible 2021 short squeeze event.
- Experts are skeptical about the strategic benefits of GameStop's recent decision to venture into Bitcoin acquisition.
GameStop, known for shaking the markets during the 2021 meme stock saga, is once again stirring up financial circles with its intention to delve into Bitcoin purchases, leading to a severe stock downturn and a NYSE response.
On March 27th, the number of GameStop shares shorted skyrocketed to 30.85 million, marking a staggering 234% hike in just one day, bordering on the levels seen during the celebrated January 2021 short squeeze. The NYSE promptly enforced a Short Sale Restriction on GameStop after observing a significant price drop surpassing 10% from the previous day’s closing, set to remain throughout that day and the next.
GameStop shares saw a drastic 22% decrease during trading, obliterating the 12% increase observed earlier due to their Bitcoin news, with shares valued at $22.09, marking a record low since last October.
The rapid selloff led to an estimated reduction in market value by $3 billion in just one day, reflecting widespread investor skepticism about GameStop's new strategic route.
GameStop’s Bitcoin pivot stirs a tempest in the marketplace.
Though GameStop did not detail the exact amount of Bitcoin it intends to purchase, following market closure on March 26th, they introduced a $1.3 billion convertible notes offering aiming to use the proceeds for 'general corporate purposes, including acquiring Bitcoin.'
Convertible notes, which transform into equity, sparked stock value concerns according to some analysts, as this raised fears of existing shareholder dilution.
Market analyst Han Akamatsu highlighted similarities to Strategy (formerly MicroStrategy), noting that when MSTR issued $1.05B of 0% convertible notes, the stock initially dipped before a surge in Bitcoin sparked a reversal.
They can still short, but only after a positive movement in the stock price allows for a more opportunistic short position.
$GME SSR Rule is on for tomorrow.
There are restrictions on repeatedly driving down the bid.
Market experts have raised concerns regarding GameStop's venture into Bitcoin. Tom Sosnoff from Tastylive likened the move to those in the dot-com bubble era, suggesting an attempt to pique investor interest without a solid strategy. pic.twitter.com/oVHumcv5XS
— Han Akamatsu 赤松 (@Han_Akamatsu) March 27, 2025
Bret Kenwell from eToro shared these apprehensions, telling Reuters that GameStop's underlying business doesn't inspire much investor confidence, leading to doubts about the long-term success of their Bitcoin move.
Kevin Malone from Malone Wealth cautioned about possible market manipulation, noting a 50-fold increase in GameStop shares traded compared to the prior Thursday, hinting at questionable short-selling practices.
Despite the high short-selling volumes, they have yet to eclipse the June 3, 2024 record of 46.20 million shares, sparked by Keith Gill's re-entry into the market with a $180 million GameStop stake.
GameStop's dramatic 22% drop on significant trading volumes from a technical perspective shows intense selling pressure and solidifies a bearish trend, with the SSR temporarily tempering further pressures.
Key price levels to observe are the $20 support mark and any rebounds possibly confronting resistance between $25-$27 due to past support levels potentially becoming resistance.
The market's significant reaction to GameStop's Bitcoin news underscores the uncertainties surrounding this new strategy, raising questions about its sustainability.
GameStop must now focus on convincing investors that their Bitcoin initiative is strategically sound and will ultimately enhance shareholder value, with market watchers keenly observing how this unfolds.
Maisie is a seasoned journalist specializing in Crypto & Financial news, having contributed to sites like Moneycheck.com, level-up-casino-app.com, and more, currently serving as Editor in Chief at Blockfresh.com.
