GameStop Adds Bitcoin to Treasury Reserves, Net Income Doubles 106%

GameStop has announced that its board of directors has unanimously approved the addition of Bitcoin to the company’s treasury reserves. This move positions the video game retailer alongside other companies that are looking to embrace a digital future. GameStop plans to use a portion of its existing cash or proceeds from future debt or equity sales to invest in Bitcoin. However, the company has not disclosed the size of the planned allocation in its latest quarterly filing.

The decision to invest in Bitcoin comes after President Donald Trump’s recent executive order to establish a strategic cryptocurrency reserve using government-owned digital assets. This order sets the stage for a broader normalization of Bitcoin in corporate finance. GameStop’s move mirrors the strategy of Strategy, which has long promoted Bitcoin as a strategic asset. This suggests that GameStop is looking to renew its appetite for risk and relevance as it tries to chart a course beyond its struggling retail business.

GameStop’s foray into crypto is not new. The company previously launched a crypto wallet in 2022 but shut it down a year later due to regulatory uncertainty. Despite this setback, GameStop remains closely watched by the crypto-curious community, given its roots in gamer culture and its strong connection to retail investors who drove its stock sky-high during the 2021 meme stock craze.

In its latest earnings report, GameStop posted a rare bright spot with its net income more than doubling in the fourth quarter to $131.3 million, up from $63.1 million a year earlier. This increase was driven by aggressive cost-cutting measures, including the closure of 590 stores in the US in fiscal 2024 and plans to close even more this year. However, overall revenue fell to $1.28 billion from $1.79 billion, indicating the continued decline of its traditional gaming retail business.

Adding Bitcoin to its reserves appears to be part of GameStop’s broader effort to adapt amid ongoing challenges in its core business. The move may also reflect an attempt to re-engage retail investors and signal a willingness to explore alternative strategies, even as the company continues to navigate a difficult turnaround. This strategic shift could help GameStop stay relevant in an ever-evolving market landscape.