GameStop is making a big move. The video game retailer just announced plans to add Bitcoin to its treasury reserves. Investors reacted fast — sending GameStop stock soaring over 10% early Wednesday.
The company also posted better-than-expected earnings for the fourth quarter. It reported a profit of 30 cents per share, crushing analyst expectations of just 8 cents. But revenue took a hit, falling 28% to $1.28 billion—well below the $1.48 billion analysts had predicted.
A Pile of Cash and a New Strategy
Despite weaker revenue, GameStop is sitting on a massive cash reserve. At the end of the quarter, it had nearly $4.8 billion in cash, cash equivalents, and marketable securities.
And now, the company is putting that money to work. Late Tuesday, GameStop’s board unanimously approved a plan to invest in Bitcoin. The company didn’t set a cap on how much Bitcoin it might buy, nor did it rule out selling its holdings in the future.
GameStop’s move follows in the footsteps of companies like Tesla, MicroStrategy, and Coinbase, which have also added Bitcoin to their balance sheets.
Why Bitcoin?
According to GameStop’s SEC filing, the goal of this investment strategy is twofold:
- Keep enough liquidity to handle day-to-day business expenses.
- Optimize returns by investing in assets like Bitcoin.
CEO Ryan Cohen is leading the charge, along with the company’s investment committee. Notably, committee members—including Cohen—are also free to invest personally in the same assets as GameStop. The board believes this aligns their financial interests with the company’s success.
GameStop Stock Bounces Back
GameStop’s stock has had a rough year, dropping about 19% before Tuesday’s close. But Wednesday’s rally put GME on track for its biggest one-day gain since June 2024, when shares jumped 14.4%.
The stock rebounded above its 50-day moving average, an important technical milestone. Investors are clearly excited about the new Bitcoin strategy, but it remains to be seen if the momentum will last.
Bitcoin Prices Also Climb
GameStop’s big Bitcoin bet wasn’t the only reason for excitement. The cryptocurrency itself is on a strong run, trading around $88,000 early Wednesday—up nearly 5% in the past week.
Some analysts believe GameStop’s move could fuel further institutional interest in Bitcoin. Others warn that Bitcoin’s volatility could pose risks if the price swings in the wrong direction.
What’s Next for GameStop?
GameStop has been reinventing itself since the meme stock frenzy of 2021. With its physical stores struggling, the company has been looking for new ways to stay relevant. Its Bitcoin strategy could be a bold step forward—or a risky gamble.
One thing is certain: investors are paying attention.
