GameStops Bold Move: Bitcoin Added as Treasury Asset, Stock Surges
- GameStop invests corporate cash in Bitcoin, following MicroStrategys lead.
- Stock price jumps 12% after GameStop announces Bitcoin reserves move.
- GameStops Bitcoin strategy aims to use crypto for future growth.
GameStop announced that its board of directors made a decision to add Bitcoin to its reserve assets. The company revealed this decision through its Form 10-K filing with the SEC on March 25, 2025. This allows the company to make cash investments as well as future debt and equity issuances into Bitcoin.
GameStop Ventures Into Bitcoin Investments
The decision comes after MicroStrategy and other companies made substantial Bitcoin investments. GameStop has not set a limit for its BTC reserve and maintains the right to sell any acquired assets. However, the company admits that its Bitcoin investment strategy faces uncharted risks.
The company aims to use its massive cash reserves to implement its Bitcoin investment strategy. In February 1, 2025 financial report, GameStop held $4.8 billion in cash and cash equivalents. The substantial financial reserves enables GameStop to invest in cryptocurrencies to diversify its treasury reserves and strengthen its financial stability.
GameStop outlined several risks related to BTC such as market manipulation, volatility and security vulnerabilities in its decentralized network. The company stated that it continues to monitor these risks and evaluate the performance benefits of this strategy. Moreover, the company identified limited liquidity and potential compliance issues related to cryptocurrency markets.
GameStop Scales Down Business Operations
GameStop has conducted various changes to its business operations such as reducing its physical store network. The company reported $3.823 billion net sales in the fiscal year 2024 which represents a decline from $5.273 billion in the previous year. However, Gamestop earned a net income of $131.3 million which surpassed the $6.7 million in fiscal year 2023.
GameStop successfully exited Italy and closed all its stores in Germany in the fourth quarter. The company conducted this strategic change to adapt to the digital distribution trends and changing consumer preferences. GameStop, under CEO Ryan Cohens leadership, maintains its focus on cost reduction and operational efficiency.
Impact of Gamestops New Investment
GameStop stock prices surged after the company announced its investment in BTC. GME shares increased more than 12% in pre-market hours. This surge in stock prices indicates investor optimism in the companys Bitcoin investment strategy.
GameStop continues to evaluate how BTC price volatility could affect its business operations. GameStop plans to monitor the market volatility to develop appropriate adaptations for its new approach.
Read more: https://www.tronweekly.com/gamestop-approves-bitcoin-as-a-treasury-reserve/
Text source: TronWeekly
