GameStop-Themed Memecoin Takes Sharp U-Turn, Tanks 94% After Company's New Debt Offering To Buy Bitcoin
A cryptocurrency named after GameStop Corp. (NYSE:GME), which jumped more than fivefold due to the firm’s Bitcoin (CRYPTO: BTC) treasury strategy, dramatically reversed course on Wednesday.
What happened: BNB Chain (CRYPTO: BNB)-based GameStop Coin (GME) tanked 94% in the last 24 hours, wiping out all of the gains from the previous day’s 467% rally. The meme coin exhibited rapid, short-lived rallies before eroding its entire value.
It must be noted that the meme coin isn’t related to GameStop in any way but merely capitalizes on the hype surrounding the meme stock.
See Also: Jim Cramer Applauds GameStop For Acting On His ‘Bitcoin Ploy,’ CEO Ryan Cohen Can’t Help But React
Why It Matters: The pullback mirrored the movement of GameStop's shares, which tumbled 7.62% in after-hours trading after the company announced a $1.3 billion convertible debt offering.
The offering allows investors to convert bonds into a predetermined number of shares on or before April 1, 2030, potentially diluting shareholders' value.
In a recent filing, GameStop approved adopting Bitcoin as a treasury reserve asset and stated that it intended to support the purchases using cash, future debt, and equity issuances.
Price Action: At the time of writing, GME was exchanging hands at $0.0001375, down 94% in the last 24 hours, according to CoinMarketCap.
Before the after-hours plunge, GME shares closed 11.7% higher at $28.36 during Wednesday’s regular session, according to data from Benzinga Pro.
The stock demonstrated high momentum—a measure of a stock's relative strength based on its price movement patterns and volatility—as of this writing. Visit Benzinga's Edge Rankings score to identify stocks with a higher momentum score.
Photo by Avi Rozen on Shutterstock
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