GameStop Adds Bitcoin to Treasury Reserves

In a very brief statement released alongside fourth-quarter results on Tuesday, the company said that its board had "unanimously approved an update to its investment policy to add Bitcoin as a treasury reserve asset".

GameStop has disclosed plans to add Bitcoin to its treasury assets, a decision that comes as the company reported a smaller-than-expected net loss for the fourth quarter.

The video game retailer's shares rose 10% to $27.89 in pre-market trading on Tuesday.

For the three months ended December 31, GameStop reported a net loss of $68.4 million, or $0.74 per share, compared with a net loss of $352.1 million, or $3.83 per share, a year earlier.

Excluding one-time items, the company reported a loss of $0.53 per share, beating the average analyst estimate of $0.60 per share loss, according to Refinitiv.

Revenue fell 1.8% to $2,240.3 million, compared with analysts' estimates of $2,181 million.

Announcing the move to invest in Bitcoin, GameStop said its board had unanimously approved an update to its investment policy to add Bitcoin as a treasury reserve asset.

The company, which has been the subject of intense interest from retail investors in recent years, said it would make an initial investment of up to $500 million of opportunistic purchases over time.

"The company will evaluate potential investments in Bitcoin in the context of relevant economic and market conditions and reserves the right to terminate or adjust the program at any time and in its sole discretion," it added.

GameStop also declared a new common stock dividend, payable on 19 January to shareholders of record on 12 January. The dividend will be paid in the form of one new common stock fractionally advanced for every one common stock held.

The company, which is in the process of transforming its business to focus on e-commerce, reported a 3.4% rise in comparable-store sales for the quarter.output: A significant beat for quarterly earnings put a rocket underneath GameStop's (NYSE:GME) shares in pre-market trading on Tuesday. Its shareholders clearly believe the company is going to the moon and it's now one step closer, albeit the stock has a history of going up and down faster than a yo-yo.

Retail operations aren't the reason why GameStop's shares are flying - they never are. This time it's about the company's move into bitcoin. The board has approved a plan to let the company invest in the cryptocurrency.

In doing so, GameStop effectively positions itself as going down the same path as Strategy (formerly called MicroStrategy) (NASDAQ:MSTR), whose shares have become a proxy for the bitcoin price due to its large investment in the digital asset. No-one ever asks what MicroStrategy does day-to-day as a business, and increasingly the same could apply to GameStop.

The company said it would make an initial investment of up to $500 million of opportunistic purchases over time and evaluate potential investments in bitcoin in the context of relevant economic and market conditions. It also reserves the right to terminate or adjust the program at any time and in its sole discretion.

"We are pleased to announce the addition of bitcoin to GameStop's treasury investment program, a decision that reflects our ongoing commitment to maximize shareholder value," said chair of the board, Paul M. Spotorno.

"This new program provides the company with an opportunity to invest in a highly recognized and rapidly evolving cryptocurrency that may serve as a valuable asset in the rapidly changing technological landscape."

The board also declared a new common stock dividend, payable on 19 January to shareholders of record on 12 January. The dividend will be paid in the form of one new common stock fractionally advanced for every one common stock held.

The company also said it will report its first-quarter fiscal 2024 results on 2 May.