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By many standards, today’s NASDAQ 100 and S&P 500 look a lot like they did during the 2000 internet bubble, when the narrative that stocks involved with new technologies could only go up, sending a clear message that complacency (along with valuations) was sitting at an all-time high. As many know, the 2000 internet bubble didn’t end well, wiping out many businesses, and those that survived struggled for several years before reclaiming their previous prices.
That same complacency seems to be returning, particularly around the rise of cryptocurrency and blockchain.
While blockchain itself may be transformative, the way certain companies are leveraging the hype, i.e., pivoting from failing core businesses to Bitcoin investments, is unsettlingly similar to the dot-com bust. Three companies in particular, stand out: MicroStrategy Inc (NASDAQ:MSTR)., AMC Entertainment (NYSE:AMC) Holdings Inc., and GameStop Corp (NYSE:GME). Their recent moves suggest more speculation than strategy.
1. MicroStrategy: A Bitcoin-Only Business in Disguise
Any investor should be able to recognize the red flags in MicroStrategy. Originally a software firm, MicroStrategy has transformed into what amounts to a Bitcoin holding company.
Over the past few years, it’s acquired over 597,000 BTC, currently valued at more than $64 billion. However, this massive stake hasn’t been funded by profits. Instead, MicroStrategy has issued new blocks of stock to finance its purchases.
This is like when businesses in 1999 pivoted “online” when their core operations showed no results, but the internet was a way to get markets excited again. If Bitcoin is the “dot com” signature, and blockchain is the internet, then companies that pivot into Bitcoin mining or buying Bitcoin for their balance sheets outright make for the speculative bubble scenario.
Essentially, MicroStrategy investors are buying into an ultra-leveraged Bitcoin fund with no revenue cushion. When Bitcoin rises, this vehicle can outperform significantly and mitigate the effects of share dilution. But if Bitcoin drops and MicroStrategy continues diluting its shareholders, losses could spiral.
And it’s not just a theory. The company has reportedly paused further Bitcoin purchases amid a class-action lawsuit concerning its disclosures.
2. AMC: Throwing A Hail Mary With Bitcoin
It would take a significant amount of capital and imagination to reinvent the movie theater business, which is why AMC has been losing money year after year for some time now. Online streaming and the “at-home” movie experience have squeezed out profits and market share from this once giant brand.
AMC reported a $202 million loss in Q1 2025. To try to revive its popularity and valuation, AMC has taken a page out of MicroStrategy’s playbook, pivoting into issuing stock in order to buy Bitcoin for its balance sheet. The hope is that investors will keep subscribing to the newly issued stock betting that a cryptocurrency bull run will save the company—and their investment.
The truth is, it likely won’t. AMC is in the movie business, not the asset management business, and has been mismanaged, falling behind in today’s marketplace.
Sadly, some in the market will fall for this modern-day Ponzi scheme. Those who act early may be able to make a profit at the expense of large losses for those who enter late in this speculative situation.
3. GameStop: The King of Meme Stocks
During the COVID-19 pandemic, GameStop became a broad case study of master speculation. Cheap money and low interest rates triggered a massive short squeeze in the stock, sending it to stratospheric valuations. While this event made many millionaires overnight, it also created unrealistic expectations about how the market works.
GameStop is now leveraging its notoriety in a new way. Following its recent capital raise via convertible notes, GameStop has invested more than $500 million into Bitcoin. By diluting shareholders through stock issuance, GameStop makes its cash flow seem healthy. But, like AMC, its core retail business is bleeding cash.
As with MicroStrategy and AMC, this approach may work very well for those early enough in the stock and hoping that Bitcoin’s price rises. However, if Bitcoin declines and risk appetites wane, driving money away from buying newly issued stock at these companies, the losses could be too significant for any shareholder to recover from.
