TLDR
- Bitcoin has been given the nod by GameStop’s board as a key asset, following a unified decision.
- The stock of GameStop saw a notable rise exceeding 6% post-announcement, thanks to after-hours trading.
- As of the beginning of February 2025, GameStop’s liquid assets totalled $4.7 billion.
- Hints of this strategic shift were dropped last month by CEO Ryan Cohen when he shared a moment captured with Michael Saylor.
- Through savvy business maneuvers, GameStop thrived with $131 million in profits, linked to an impressive $3.8 billion in sales for the 2024 fiscal cycle.
The well-known video game retailer has embraced Bitcoin in its financial strategy, revealing this in their 2024 annual report submitted to the SEC on March 25.
GameStop’s policy revision was unanimously rubber-stamped by its directors on March 18, paving the way for Bitcoin and other digital currencies as investment vehicles for the company.
The news invigorated GameStop's stock performance. Despite closing at $25.40 with a slight downturn during the day, shares surged over 6% in after-hours trading.
The company made it clear in its SEC filing GameStop declared there is no cap on their potential Bitcoin acquisitions, while also holding the right to divest these assets as necessary.
Just a month after conjectures about GameStop’s crypto aspirations surfaced, CEO Ryan Cohen’s February post with Michael Saylor fanned the flames.
Following the footsteps of Strategy’s Bitcoin acquisition pathway.
Michael Saylor’s Strategy has made a name for itself with a robust Bitcoin stash, boasting over 447,000 tokens in their February report, claiming the title of a leading corporate holder.
As per the records of February 1, 2025, GameStop's cash reserves saw a significant jump to $4.7 billion, a leap from the prior year’s $921 million.
Under Cohen’s helm, GameStop's financial health has seen a positive shift. For 2024, profits hit $131 million backed by $3.8 billion in sales, predominantly from gaming gear.
Compared to the preceding year's modest $6.7 million profit on $5.3 billion in revenue, the current fiscal results were impressive, with fourth-quarter earnings more than doubling to $131.3 million.
Cohen, previously the visionary behind Chewy, stepped into the CEO role nearly 18 months ago, focusing on expense reductions and operational refinements to drive profitability.
GameStop’s plunge into Bitcoin represents a fresh direction aimed at invigorating its business plan. They acknowledged, however, in their SEC report, the inherent volatility and price swings of Bitcoin.
Bitcoin has experienced volatile price shifts lately, dropping to roughly $88,000 after peaking above the $100,000 mark.
The cryptocurrency field has been unpredictable ever since Donald Trump's election victory, with fluctuating prices emphasizing the riskiness of the market GameStop is venturing into.
Concerns over GameStop’s Bitcoin endeavor have been raised by some Wall Street experts. Analyst Michael Pachter from Wedbush mentioned to Yahoo Finance a potential stock dip if GameStop allocated all its $4.6 billion cash to Bitcoin.
Reflecting a broader trend, companies have begun adding Bitcoin to their assets, with Tesla’s $1.5 billion purchase in 2021 making waves, even though it later shed most of its holdings.
GameStop’s choice mirrors Strategy’s use of corporate cash for Bitcoin reserves. Strategy has benefited from this tactic, with its share price climbing over 84% as Bitcoin’s value ascended.
