- GameStop board unanimously approved adding Bitcoin as a treasury reserve asset
- The company held nearly $4.8 billion in cash as of February 1, 2025
- GameStop’s Q4 net income was $131.3 million, more than double from the previous year
- The move follows Strategy (formerly MicroStrategy), which owns over 447,000 Bitcoin tokens
- GameStop stock jumped over 12% in pre-market trading following the announcement
GameStop, the video game retailer turned meme stock sensation, announced Tuesday that its board of directors has unanimously approved a plan to invest corporate cash in Bitcoin.
The announcement confirmed earlier reports from February suggesting the company was exploring cryptocurrency investments.
The decision allows GameStop to use a portion of its substantial cash reserves to purchase Bitcoin and U.S. dollar-denominated stablecoins. As of February 1, the company held nearly $4.8 billion in cash and cash equivalents, up significantly from $921 million a year earlier.
In a filing with the Securities and Exchange Commission, GameStop stated it
“has not set a maximum amount of Bitcoin we may accumulate, and may sell any Bitcoin we may acquire.”
The company also acknowledged the risks involved, noting that “Bitcoin is a highly volatile asset and has experienced significant price fluctuations over time.”
The investment policy update was approved unanimously by GameStop’s board on March 18. The company also shared the news on social media, indicating that Bitcoin would serve as a “Treasury Reserve Asset.”
Stock Price Jumps
The video game retailer’s stock responded positively to the announcement. After closing down 0.82% at $25.40 on Tuesday, GME shares jumped more than 12% in pre-market trading on Wednesday.
GameStop’s move mirrors the strategy employed by software company Strategy, formerly known as MicroStrategy. Under CEO Michael Saylor, Strategy has purchased more than 447,000 Bitcoin tokens, becoming the largest corporate holder of the cryptocurrency.
The connection between the two companies was hinted at last month when GameStop CEO Ryan Cohen posted a photo of himself with Strategy’s Michael Saylor on social media platform X. This post sparked initial speculation about GameStop’s potential interest in cryptocurrency.
— Ryan Cohen (@ryancohen) February 8, 2025
Cohen, who founded online pet supplies retailer Chewy, has been working to revive GameStop’s struggling brick-and-mortar business since taking the helm. His approach has focused on cutting costs and streamlining operations to improve profitability.
The Bitcoin investment represents Cohen’s latest effort to transform the company. A previous attempt to enter the digital asset space occurred under former CEO Matt Furlong, who unsuccessfully tried to launch NFT collectibles before being terminated.
Fourth-Quarter Financial Results
Along with the cryptocurrency announcement, GameStop released its fourth-quarter financial results. The company reported net income of $131.3 million, more than doubling the $63.1 million earned during the same period last year.
For the full 2024 fiscal year, GameStop disclosed profits of $131 million on $3.8 billion in sales, which primarily came from selling video game hardware and accessories. This marks an improvement from the previous year, when the company reported a profit of $6.7 million on $5.3 billion in sales.
Despite the positive quarterly earnings, GameStop’s net sales for Q4 reached $1.28 billion, representing a 28% decline from the year-earlier period. The company’s full-year adjusted EBITDA was $36.1 million, down from $64.7 million the previous year.
Bitcoin itself has experienced volatility recently. After reaching a record high above $100,000, the cryptocurrency has declined approximately 18% to around $88,000.
Some Wall Street analysts remain skeptical about GameStop’s Bitcoin strategy. Wedbush analyst Michael Pachter commented, “The problem with that thinking is MicroStrategy trades at about two times their bitcoin holdings. If GameStop were to buy all bitcoin with their $4.6 billion in cash and trade at two times [their bitcoin holdings,] the stock would drop five bucks.”
The company’s investment policy shift comes at a time when GameStop has been stockpiling cash under Cohen’s leadership. The substantial increase in cash reserves provides the financial flexibility to pursue this new cryptocurrency strategy while continuing to manage its core retail business.
