Wedbush Analyst’s Skepticism On GameStop’s Strategy Post Bitcoin Investment Fails To Turn
June 11, 2025
Wedbush analyst Michael Pachter said GameStop Corp’s (GME) stock price hinges largely on speculative enthusiasm for overpriced assets, as the company’s plan to revive its core video game business remains unclear.
The analyst has expressed doubts about GameStop’s current strategy, particularly its recent investment in Bitcoin.
Pachter noted that the company’s decision to purchase 4,710 bitcoins, worth over half a billion dollars, may not be a sound business move.
He questioned why investors would pay more than twice the company’s cash value for the possibility of GameStop converting more of its cash into Bitcoin, especially when they could invest in Bitcoin or a Bitcoin ETF themselves.
The analyst maintained his ‘Underperform’ rating on GameStop and set a 12-month price target of $13.50, which is 55% below the stock’s recent close of $30.15.
In its first-quarter (Q1) earnings report, GameStop reported a 17% decline in revenue year-over-year (YoY), to $732.4 million, missing the analysts’ consensus estimate of $754.2 million.
This decline was attributed to reduced demand for physical game purchases and decreased earnings from its hardware and accessories segment.
Despite these challenges, the company reported a net profit of $44.8 million, a significant turnaround from a $32.3 million loss the previous year.
GameStop also announced plans to close nearly 600 U.S. stores and exit its Canadian operations as part of a broader restructuring effort.
The company’s stock is buoyed by speculative interest, despite lacking a defined recovery roadmap for its core video game retail operations, the analyst remarked.
The ongoing transition from physical to digital gaming, coupled with the rise of subscription services and streaming platforms, poses significant challenges to GameStop’s traditional business model.
Pachter emphasized that the company’s lack of a clear strategy for entering new growth categories and its reliance on speculative investments, such as Bitcoin, could hinder its long-term success.
On Stocktwits, retail sentiment around GameStop remained in ‘neutral’ territory.
GameStop stock has lost over 8% year-to-date and more than 5% in the last 12 months.
Also See: Meta’s New AI Model With Advanced Physical Reasoning Abilities Keeps Retail Confidence Intact
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