TLDR
GameStop has approved Bitcoin as a “Treasury Reserve Asset” in a unanimous board decision
The company’s stock rose over 6% in after-hours trading following the announcement
GameStop held $4.7 billion in cash as of February 1, 2025
CEO Ryan Cohen hinted at this move last month by posting a photo with Strategy’s Michael Saylor
GameStop reported profits of $131 million on $3.8 billion in sales for fiscal year 2024
Video game retailer GameStop has updated its investment policy to include Bitcoin as a “Treasury Reserve Asset.” The company announced the change in its 2024 annual report filed with the Securities and Exchange Commission (SEC) on Tuesday, March 25.
The board of directors unanimously approved the policy update on March 18. This new strategy allows GameStop to invest its corporate cash in Bitcoin and other cryptocurrencies.
GameStop’s stock responded positively to the news. After closing at $25.40 with a 0.82% loss for the regular trading day, GME shares jumped more than 6% in after-hours trading following the announcement.
The company made it clear in its SEC filing that it has not set any upper limit on how much Bitcoin it may purchase. GameStop also noted that it reserves the right to sell any Bitcoin it acquires in the future.
This move comes about a month after speculation began about GameStop’s interest in cryptocurrency investments. CEO Ryan Cohen had hinted at this direction in February when he posted a photo on social media with Michael Saylor, the Executive Chairman of Strategy (formerly MicroStrategy).
Following Strategy’s Bitcoin Playbook
Michael Saylor’s Strategy is known for its massive Bitcoin holdings. The company currently holds more than 447,000 Bitcoin tokens, according to a February filing, making it the largest corporate holder of the cryptocurrency.
As of February 1, 2025, GameStop held $4.7 billion in cash and cash equivalents. This represents a major increase from the $921 million reported a year earlier.
The company’s financial position has been improving under Cohen’s leadership. For its 2024 fiscal year, GameStop reported profits of $131 million on $3.8 billion in sales, which came primarily from video game hardware and accessories.
This performance marks an increase from the previous year when the company reported a profit of $6.7 million on $5.3 billion in sales. The fourth-quarter results showed net income of $131.3 million, more than double the $63.1 million earned in the same quarter last year.
Cohen, who founded online pet supplies retailer Chewy, took over as CEO nearly a year and a half ago. Since then, he has focused on cutting costs and streamlining operations to make the business profitable.
This move into Bitcoin represents GameStop’s latest effort to revitalize its business model. The company acknowledged in its SEC filing that this strategy comes with risks, noting that “Bitcoin is a highly volatile asset and has experienced price fluctuations over time.”
Bitcoin itself has seen major price movements recently. After reaching a record high above $100,000, the cryptocurrency has declined about 18% to approximately $88,000.
The cryptocurrency market has been on a roller coaster ride since President Donald Trump won reelection. These price swings highlight the volatile nature of the asset class that GameStop is now entering.
Some Wall Street analysts have expressed caution about GameStop’s Bitcoin strategy. Wedbush analyst Michael Pachter told Yahoo Finance, “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 plan follows a trend of corporations adding Bitcoin to their balance sheets. Tesla made headlines in 2021 when it purchased $1.5 billion in Bitcoin, though it later sold most of its holdings.
GameStop follows Strategy’s approach of using corporate cash to buy Bitcoin as a reserve asset. Strategy’s stock has performed well with this strategy, rising over 84% in the past year as Bitcoin’s price increased.
