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This Month’s Featured News
GameStop Looks Broken: Here’s Why GME Could Crash in 2026
Submitted by Thomas Hughes. Date Posted: 12/11/2025.

Quick Look
- GameStop is on track for another substantial stock price decline because its core business continues to flounder.
- The questionable Bitcoin strategy exposes it to significant risks, as evidenced by Strategy’s stock price decline.
- Analysts, institutions, and short sellers combine to form a strong headwind in December 2025.
GameStop’s (NYSE: GME) fiscal Q3 earnings were better than expected, but the stock remains a poor choice to hold, buy, or trade. That’s because the core retail business continues to flounder, reported strengths are tied to a cash balance linked to aggressive dilution, and the company’s Bitcoin (BTC) strategy is highly questionable. While the company has converted some of its cash into BTC, the rationale for holding Bitcoin remains tenuous. The critical takeaway is that other BTC-focused stocks are in even worse condition (in terms of shareholder value) than GameStop, increasing the odds that GME’s stock is on track for a massive decline.
MicroStrategy (NASDAQ: MSTR) is a prime example of why BTC-focused companies can be problematic. The company has repeatedly diluted shares to fund Bitcoin purchases, eroding shareholder value while increasing exposure to crypto volatility. In Q4 2025, Bitcoin pulled back sharply from its highs and is trading well below GameStop’s average entry point; that decline has had an outsized effect on MicroStrategy’s share price, highlighting similar downside risk for GME. Down more than 50% from its highs, MSTR appears set for another leg down that could push it below $150, to levels not seen in several years.
GameStop’s Core Business Falters Again in Q3
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GameStop’s core business continues to struggle, which showed up in its Q3 results. The company reported $821 million in net revenue, down 4.5% year-over-year (YOY), driven by a 12% decline in hardware and a 27% decline in software sales. These segments account for more than 70% of the business and were only partially offset by strength in the Collectibles segment. Collectibles rose 27% YOY, helped by an intensified focus on trading cards and “geek” culture, but sales remain below prior peaks and may never return to earlier levels.
Margin trends were healthier: management reduced store footprint and operating costs, shifted mix toward higher-margin collectibles, and produced an operating profit. However, much of the company’s reported strength is tied to its cash balance — which is exposed by the Bitcoin strategy and the pressure to show growth. Investors have waited years for a coherent growth plan, and none has yet emerged.
GameStop Has Little Market Support
GameStop’s price is unlikely to move higher because it has little market support and few compelling reasons for investors to buy it.
Only two analysts now cover the stock, and MarketBeat’s consensus sits at Reduce, projecting roughly 40% downside. Institutions, which own about 30% of the shares, shifted from net buying to net selling in Q4. Their selling, combined with elevated short interest, creates significant resistance to any retail-driven momentum.
While short interest declined over the prior two months, it remains elevated — above 15% in late November — and could increase following the Q3 release.
For those hoping for another meme-quality short squeeze, be warned: this market is played. The retail dollars that drove the meme rallies in 2021 and 2024 are unlikely to be replicated.
GameStop Price Action Deteriorates: Lower Lows Are Indicated
GME fell about 5% after the Q3 report and faces the risk of a deeper decline. The stock slipped below its cluster of moving averages, signaling broad-based bearishness that could persist into the next session. Critical support sits near the bottom of the 18-month trading range — roughly $20 — and may be tested or broken before year-end.
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