Shares of GameStop (GME) jumped over 15% in pre-market trading today after the video game retailer confirmed plans to add Bitcoin as a treasury reserve asset, according to Yahoo Finance data.
The company’s stock climbed to $29.6 in pre-market trading, following Tuesday’s close at $25.4. Despite a roughly 68% surge in GameStop shares over the last year, the so-called meme stock is still down nearly 19% so far this year.
GameStop, the 2021 short squeeze icon, on Tuesday joined Strategy, Tesla, and a growing list of public companies in stacking Bitcoin on its balance sheet.
The company’s board of directors unanimously approved the Bitcoin strategy, which was revealed during its fourth quarter earnings release.
GameStop may use existing cash or future debt and equity offerings to invest in Bitcoin, though specific purchase amounts remain undisclosed.
The announcement comes alongside improved quarterly performance, with GameStop reporting around $131 million in net income for the fourth quarter, up from $63 million in the same period last year.
The retailer held about $4.6 billion in cash at the end of the third quarter of 2024, according to its disclosure to the SEC.
The Bitcoin decision follows a February report from CNBC which revealed that GameStop was exploring investments in Bitcoin and other crypto assets.
The report came just days after the company’s CEO Ryan Cohen met with Bitcoin advocate Michael Saylor, Strategy’s Executive Chairman. Saylor, however, was not involved in the company’s internal crypto discussions.
Later that month, Matt Cole, CEO of Strive Asset Management, co-founded by Vivek Ramaswamy, sent a letter to GameStop CEO Ryan Cohen, proposing the company use its cash reserves to invest in Bitcoin.
In his statement, Cole claimed that GameStop could become “the premier Bitcoin treasury company in the gaming industry.”
GameStop previously explored digital assets through an NFT marketplace launched in July 2022, but scaled back the initiative in early 2024 citing “regulatory uncertainty.” The company also discontinued its crypto wallet service in late 2023.
The company has faced challenges from increased digital game downloads. This strategic pivot could help stabilize GameStop’s declining core business and presents an opportunity to enhance its financial position in the competitive market.
Since Donald Trump’s election win in November 2024, a growing number of corporations have started converting their cash reserves to Bitcoin. The trend is driven by Trump’s pro-crypto agenda and his administration’s commitment to fostering a more favorable regulatory environment for digital assets.
