GameStop makes its first bitcoin buy. Here's why the stock is pulling back.

By James RogersGameStop's purchase of 4,710 bitcoin marks its first cryptocurrency purchase since it announced earlier this year that it would make bitcoin a treasury-reserve assetGameStop Corp. shares fell Wednesday after the videogame retailer announced its first purchase of bitcoin on a day that bitcoin prices fell.In a one-sentence press release, GameStop (GME) said it has purchased 4,710 bitcoin.The company did not reveal the price paid for the bitcoin (BTCUSD). At recent prices, with bitcoin down 1.5% at $107,479, the total value of GameStop's purchase would be a little over $506 million.Meanwhile, GameStop's stock dropped 10.9% on Wednesday, after soaring 24.8% over the previous three sessions.Related: GameStop's stock is in play again. This time it's not a meme thing.Earlier this year, GameStop's board unanimously approved an update to its investment policy to add bitcoin as a treasury-reserve asset.With the move, GameStop followed in the cryptocurrency footsteps of software company and bitcoin play MicroStrategy Inc. (MSTR), which is doing business as Strategy, and Japanese company Metaplanet Inc. (JP:3350), which also uses bitcoin as its core treasury-reserve asset.And on Tuesday, former presidential candidate and current candidate for Ohio governor, Vivek Ramaswamy, said his firm, exchange-traded-fund manager Strive Asset Management, would buy struggling biotechnology companies and use the cash on their balance sheets to buy bitcoin. And Trump Media & Technology Group Corp. (DJT), the parent of President Donald Trump's social-media platform, Truth Social, confirmed Tuesday it plans to raise money by selling shares in order to buy bitcoin.Prior to GameStop's addition of bitcoin as a treasury-reserve asset, the company's chief executive, Ryan Cohen, posted a picture of himself with Michael Saylor, the executive chair of Strategy, sparking chatter that a cryptocurrency announcement was coming for the videogame retailer and original meme stock.GameStop's move into bitcoin has been cited as a way for the company to gain some breathing room after a challenging few years marked by declining sales and intense competition from digital gaming and streaming.Related: Why GameStop is trying to be the next MicroStrategy with its bitcoin moveIn December 2023, GameStop's board of directors approved a new investment policy permitting GameStop to invest in equity securities, among other things. The board gave Cohen the authority to manage the investment portfolio.The company ended its recent fiscal fourth quarter with cash, cash equivalents and marketable securities of $4.775 billion.GameStop, like AMC Entertainment Holdings Inc. (AMC), saw its shares skyrocket during the 2021 meme-stock frenzy. However, the stock is down 63.2% from its all-time closing high of $86.88 on Jan. 27, 2021.The videogame retailer's shares are up 1.9% in 2025, outpacing the S&P 500 index's SPX 0.5% gain.-James RogersThis content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.