GameStop Corp. has updated its investment policy to include Bitcoin as a treasury reserve asset, the video game retailer announced Tuesday. The board of directors “unanimously approved” the move, aiming to diversify the company’s financial holdings.
GameStop said it will not be setting a ceiling on the amount of bitcoin it may purchase, which it will be doing so in an all-cash deal, according to CNBC.
This decision aligns GameStop with other corporations integrating cryptocurrencies into their financial strategies. Notably, Strategy, formerly known as MicroStrategy, has been accumulating Bitcoin extensively and is currently its largest corporate bitcoin holder.
Following the announcement, GameStop’s stock experienced a significant surge. Shares rose 15% after the news broke, reflecting investor enthusiasm for the company’s strategic pivot.
The move comes amid a broader trend of companies incorporating digital currencies into their balance sheets. Earlier this month, President Donald Trump signed an executive order to establish a strategic Bitcoin reserve using tokens already owned by the government.
In its recent financial report, GameStop disclosed fourth-quarter earnings of 29 cents per share on net sales of $1.28 billion. This compares to a profit of 21 cents per share on sales of $1.79 billion in the same period the previous year.
In early 2021, GameStop became the center of a significant stock market event when its shares surged by approximately 1,800% within a few weeks. This dramatic increase was largely driven by individual investors coordinating on the Reddit forum r/WallStreetBets, aiming to challenge institutional investors who had heavily shorted the stock.
The unprecedented volatility led to scrutiny from regulatory bodies, including the Securities and Exchange Commission (SEC), which raised concerns about market efficiency and the potential need for enhanced reporting on short-selling activities.
GameStop’s move into cryptocurrencies is the latest strategy by CEO Ryan Cohen to revitalize the struggling brick-and-mortar retailer. Under his leadership, the company has prioritized cost-cutting measures and operational efficiency to drive profitability.
The company’s decision to invest in Bitcoin reflects a strategic effort to leverage digital assets amid evolving market dynamics.