Here is a comprehensive overview of GameStop's decision to include Bitcoin as a reserve asset:

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### **1. Policy Adjustments and Background**

- **Investment Policy Update**: On March 26, 2025, GameStop announced that the board unanimously approved an updated investment policy, incorporating Bitcoin and USD stablecoins into its treasury reserve assets. The company indicated that it may use funds from cash, debt, or equity financing to invest in Bitcoin in the future, without setting a position limit, while reserving the right to sell Bitcoin at any time.

- **External Driving Factors**: As early as February 2025, the CEO of investment firm Strive Asset Management wrote to GameStop Chairman Ryan Cohen, suggesting that the company adopt Bitcoin as a reserve asset to change its financial outlook. This proposal may have laid the groundwork for subsequent decisions.

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### **2. Financial Measures and Market Response**

- **Fundraising Plan**: On March 27, GameStop further announced plans to raise $1.3 billion through a private placement of convertible preferred notes (due 2030), with a potential additional $200 million. The funds raised will be used for general corporate purposes, including purchasing Bitcoin according to the new policy.

- **Stock Price Volatility**: Following the policy announcement, GameStop's stock price significantly increased:

- U.S. stocks rose 6.30% after hours, reported at $25.40;

- The after-hours increase expanded to 9.2%, reported at $27.74;

- During pre-market trading, it rose by 13%.

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### **3. Company Financial Condition and Performance**

- **Cash Reserves and Profitability**: As of February 1, 2025, GameStop held nearly $4.8 billion in cash, with a net profit of $131.3 million in the fourth quarter, far exceeding the expected $33 million, and adjusted earnings per share of 29 cents (expected 8 cents).

- **Revenue Pressure**: Despite exceeding profit expectations, fourth-quarter revenue was only $1.283 billion, down 28.4% year-on-year (from $1.794 billion in the same period last year), reflecting a continued contraction in physical business.

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### **4. Future Strategies and Potential Risks**

- **Strategic Intent**: To diversify financial risks through Bitcoin reserves and explore asset appreciation opportunities in the cryptocurrency space. This move is also seen as a transformation attempt to address the decline in traditional game retail business.

- **Market Uncertainty**: The company explicitly mentioned that Bitcoin investments may face challenges such as price volatility, liquidity risks, and regulatory changes, and acknowledged the need to strengthen internal financial controls to mitigate potential risks.

- **Investor Controversy**: Some investors are concerned that this move may deviate from the core business, but supporters argue that it is a reasonable choice to diversify assets using cash reserves.

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### **Summary and Impact**

GameStop's decision to hold Bitcoin reserves has boosted market confidence in the short term, but its long-term effects depend on the cryptocurrency market trends and the company's execution capabilities. Significant fluctuations in Bitcoin prices could impact the stability of financial reports, while ample cash reserves provide room for trial and error. This move also reflects traditional retailers' aggressive exploration in digital transformation and may serve as a reference case for the industry.$BTC