GameStop Surges on Bitcoin Bet Despite Q4 Miss

Shares of GameStop jumped 7% in after-hours trading Tuesday after the company announced it would adopt Bitcoin as a treasury reserve asset, overshadowing a set of fourth-quarter earnings results that largely missed analyst expectations. The move into digital currency, reminiscent of MicroStrategy’s pivot into Bitcoin, has sparked renewed enthusiasm in the original meme stock. While investors await more details during the earnings call, the strategic shift could redefine GameStop’s corporate trajectory, even as its core retail business continues to face significant headwinds.

For the fiscal fourth quarter ended February 1, GameStop reported adjusted earnings per share of $0.30, far surpassing consensus estimates of $0.08. Adjusted EBITDA reached $96.5 million, nearly triple the $32 million forecast by analysts. However, revenue disappointed, coming in at $1.283 billion—well below the $1.477 billion estimate and marking a steep 28% year-over-year decline. The softness was broad-based, with hardware and accessories revenue dropping 34% to $725.8 million and software revenue falling 38% to $286.2 million. One bright spot came from the collectibles segment, which grew 16% to $270.6 million, beating expectations and reflecting increased traction in non-core categories.

Despite the revenue miss, GameStop more than doubled its net income to $131.3 million, helped by aggressive cost-cutting measures. Selling, general and administrative expenses declined 21% to $282.5 million, well below the $326 million forecast. The company also completed its exit from Italy and shut down store operations in Germany, continuing a broader effort to streamline operations and reduce exposure to underperforming regions. While these efforts bolstered bottom-line results, they also underscore the ongoing challenges in the company's core business, which continues to lose relevance in an increasingly digital gaming landscape.

The most attention-grabbing headline, however, came from GameStop’s new corporate investment strategy. The company confirmed it would begin allocating a portion of its cash, and potentially future debt or equity issuances, into Bitcoin. Although no cap was placed on the amount it may accumulate, the decision follows weeks of speculation—fueled by CEO Ryan Cohen’s recent photo op with Michael Saylor, the former CEO of MicroStrategy (now simply "Strategy"), a company now defined by its Bitcoin holdings. The move also comes shortly after a new executive order from President Trump aimed at establishing a strategic reserve of government-owned cryptocurrencies, suggesting that GameStop is aligning itself with broader policy trends.

Bitcoin was trading just under $88,000 at the time of the announcement, and its inclusion in GameStop’s treasury policy positions the company in a manner similar to Strategy, whose stock has surged in tandem with the cryptocurrency’s rise. While the market remains skeptical of such moves—given the volatility and regulatory overhang surrounding crypto—GameStop’s pivot offers investors a fresh narrative, something that’s been largely absent since the initial meme stock frenzy peaked in 2021. For a company whose fundamentals have long been in question, the Bitcoin bet may prove to be a double-edged sword: a high-risk, high-reward strategy that injects excitement but also raises questions about long-term stability.

Looking ahead, expectations for the upcoming Q1 earnings season will remain muted. Soft consumer confidence, lingering inflation, and increased trade-related costs continue to shape a cautious macro environment. GameStop’s pivot into Bitcoin may not resolve its operational challenges, but it’s reigniting investor interest at a critical juncture. The company’s willingness to evolve—even if controversial—may be just enough to keep it relevant, at least for now, in a market hungry for narrative-driven plays.

As the earnings call unfolds, analysts and shareholders alike will be looking for answers to key questions: How much Bitcoin will GameStop purchase? What are the risk parameters? And most importantly, does this signal a longer-term transformation, or simply a short-term distraction from declining sales? One thing is certain—GameStop isn’t done surprising Wall Street.