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GameStop (GME) shares surged after the major gaming retailer reported Q4 earnings that beat estimates. The stock surged 8% despite also reporting a 28% drop in revenue.
GameStop also announced that its board has unanimously approved an update to its investment policy to add Bitcoin as a treasury reserve asset. ⁽¹⁾
Source: TradingView
Q4 Financial Performance
GameStop reported EPS of $0.29, surpassing analysts’ forecasts of $0.20. Revenue, however, fell to $1.28 billion, falling short of the $1.5 billion forecast. ⁽²⁾
As the industry continues to move toward digital downloads, streaming, and e-commerce platforms, GameStop’s core retail operation continues to face difficulties, as evidenced by the fall in sales.
In response to these market changes, GameStop has been implementing cost-cutting strategies, including the closure of 590 stores in the U.S. during fiscal 2024, with plans to close more stores in 2025. ⁽³⁾
GameStop’s net income for the quarter rose to $131.3 million, more than doubling from $63.1 million in the prior year period. The company attributed the improved profitability to cost-cutting measures and higher margin sales. ⁽⁴⁾
The company’s hardware and accessories segment, which includes sales of gaming consoles and peripherals, saw the steepest decline, with revenue falling 33.7% YoY to $725.8 million. Software product sales dropped 38.5% to $286.2 million, while collectibles revenue grew 15.8% to $270.6 million. ⁽⁵⁾
Investing in Bitcoin
The board of GameStop voted unanimously on adding Bitcoin as a treasury reserve asset in the company’s balance sheet.
In a filing, the company said, “a portion of our cash or future debt and equity issuances may be invested in Bitcoin” and that it had not set a maximum on the amount of Bitcoin it could accumulate or sell. The move had been the subject of recent speculation as GameStop seeks new sources of growth. ⁽⁶⁾
The investment idea has been getting attention in recent weeks with discussions between GameStop CEO Ryan Cohen and MicroStrategy leader Michael Saylor. Ryan Cohen confirmed on X that he received a letter from Matt Cole, CEO of Strive Asset Management firm, where Cole told GameStop to look into investments in Bitcoin, highlighting the company’s potential to become a leading Bitcoin treasury entity. ⁽⁷⁾
Cohen also shared a photo of himself with Michael Saylor, a bitcoin investor, sparking anticipation that GameStop would follow likewise. Investors and traders also took an interest in these talks taking place just before GameStop’s earnings announcement. ⁽⁸⁾
Markets seem optimistic that GameStop could benefit from a pro-crypto position under the Trump administration, even if bitcoin has moved lower recently from its record high.
The company’s financial strategy and market positioning in the gaming and digital asset sectors may change dramatically if it makes the move to invest in bitcoin.
