GameStop To Buy Bitcoin After Disappointing Q4 Earnings Report
GameStop announced today that it will invest in Bitcoin as a treasury reserve asset. This statement came shortly after GameStop’s Q4 2024 earnings report, which showed declining sales volume.
Despite this worrying financial report, the Bitcoin announcement boosted the firm’s stock value by around 6%. Limited crypto exposure is expected to strengthen the company’s financial position in 2025.
Will GameStop Follow MicroStrategy’s Bitcoin Plan?
GameStop, an American video game and electronics retailer, has dabbled in crypto and Web3 on several occasions. After a Reddit-driven stock squeeze in 2021, the firm has been open to new financial ecosystems, even if they don’t always pan out.
In that trend, GameStop’s latest press release states that the company will begin purchasing Bitcoin:
“GameStop today announced that its board has unanimously approved an update to its investment policy to add Bitcoin as a treasury reserve asset,” the press release claimed.
Rumors about GameStop’s possible Bitcoin investment have been circulating since last month. The firm’s CEO, Ryan Cohen, was photographed with Michael Saylor, who led his company to become a major Bitcoin holder.
The community began speculating that Saylor’s actions could serve as a blueprint for GameStop, and this was evidently well-founded.
GameStop’s board unanimously voted to buy Bitcoin on the same day the firm released its Q4 2024 earnings report. The results were significantly underwhelming. Its Q4 YoY net sales were down over half a billion dollars, and it sold nearly $1.5 billion less of merchandise in 2024 than in 2023.
Expenses were down, and net income was higher, but these are serious losses.
In other words, GameStop may be taking a much-needed gamble with this Bitcoin investment. Although its earnings trends were worrying, the company hasn’t festered into a full-blown crisis yet.
Meanwhile, since the announcement, GameStop’s after-hours stock price has jumped as high as 6%.
Since Bitcoin’s incremental annual growth rate, this bet may pay off for GameStop. Like MicroStrategy, controlled Bitcoin exposure could help drive the company’s annual revenue in a bullish market. Overall, the retailer may be able to use Bitcoin to buoy its stock value while continuing its normal business operations.
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