TLDR
GameStop’s short sales volume increased 234%, reaching 30.85 million shares
NYSE imposed a Short Sale Restriction after GME stock fell 22%
GameStop announced plans to purchase Bitcoin using proceeds from a $1.3 billion convertible notes offering
Short volume approached levels seen during the famous 2021 short squeeze
Analysts question the strategic value of GameStop’s Bitcoin acquisition plans
GameStop, the video game retailer at the center of 2021’s famous meme stock frenzy, is once again making waves in financial markets. The company’s recent announcement of plans to acquire Bitcoin has triggered a dramatic market reaction, including a steep stock decline and intervention from the New York Stock Exchange.
On March 27, GameStop’s short sales volume surged to 30.85 million shares, representing a massive 234% increase in just 24 hours. This level of short selling activity is approaching the 33.26 million shares seen during the historic January 2021 short squeeze that captivated financial markets.
The NYSE quickly moved to impose a Short Sale Restriction (SSR) on GameStop stock. This trading restriction automatically activates when a stock drops more than 10% from the previous day’s closing price and remains in effect for the rest of that trading day and the following day.
GameStop shares plunged 22% during the trading session, completely erasing the 12% gain the stock had experienced following its Bitcoin announcement. At the time of the reports, GME was trading at $22.09, its lowest level since October.
The selloff resulted in an estimated $3 billion loss in market capitalization in a single day. This sharp decline reflects deep investor skepticism about the company’s new strategic direction.
GameStop’s Crypto Pivot Sparks Market Backlash
GameStop did not specify exactly how much Bitcoin it plans to purchase. However, after markets closed on March 26, the company announced a $1.3 billion convertible notes offering, with proceeds intended for “general corporate purposes, including acquiring Bitcoin.”
Convertible notes are a form of debt that can later be converted into equity. Some analysts believe the announcement of this debt offering contributed to the stock’s decline, as it could potentially dilute existing shareholders’ stakes.
Han Akamatsu, a market analyst, drew parallels to Strategy (formerly MicroStrategy), noting that when “MSTR issued $1.05B of 0% convertible notes, the stock dipped after the announcement due to hedging shorts, but later exploded when Bitcoin ripped and the arbitrage unspooled.”
$GME SSR Rule is on for tomorrow.
They can still short, but only if the stock moves up before they can short into it.
Smashing the bid over and over is restricted. pic.twitter.com/oVHumcv5XS
— Han Akamatsu 赤松 (@Han_Akamatsu) March 27, 2025
Market experts have expressed doubts about GameStop’s Bitcoin strategy. Tom Sosnoff, founder and CEO of Tastylive, told Yahoo Finance that GameStop’s decision to buy Bitcoin feels “a little dot-comish” to him, comparing it to companies that added “.com” to their names during the internet bubble to attract investor interest without clear strategic justification.
Bret Kenwell, a US investment analyst at eToro, echoed these concerns, telling Reuters that “investors are not necessarily optimistic on the underlying business” of GameStop, calling into question the long-term viability of the Bitcoin pivot.
Kevin Malone, president and CEO of Malone Wealth, raised concerns about potential market manipulation, stating that “GameStop traded 50x more shares today than last Thursday. Not statistically possible without naked short-selling.”
The current short selling volume, while high, still falls short of the all-time record set on June 3, 2024, when it reached 46.20 million shares. That spike coincided with the return of Keith Gill, the stock trader known for his role in the 2021 GameStop short squeeze, who revealed he had resumed trading GameStop stock with $180 million.
From a technical analysis perspective, GameStop’s 22% intraday decline on huge volume indicates strong selling pressure and confirms a bearish trend. While the SSR might provide some temporary relief from additional immediate short selling pressure, the stock remains under pressure.
Key support levels to watch include the $20 mark, while any rebound attempts would likely face resistance in the $25-$27 range, which represents previous support levels that may now act as resistance.
The dramatic market response to GameStop’s Bitcoin plans highlights the uncertainty investors feel about this strategic shift. Critics are questioning its long-term viability, and the steep drop in market capitalization reflects the market’s pessimistic outlook.
GameStop now faces the challenge of convincing investors that its Bitcoin strategy is a sound decision that will ultimately benefit the company and its shareholders. The market will be closely watching how this story develops in the coming days and weeks.
