GameStop (GME) stock rose more than 6% in after-hours trading on Tuesday as the company approved a plans to buy bitcoin (BTC-USD) with its cash holdings.

The video game operator turned popular meme stock said in a release on Tuesday its board "has unanimously approved an update to its investment policy to add Bitcoin as a treasury reserve asset." 

The announcement comes about a month after CNBC reported GameStop was exploring cryptocurrency investments. On Feb. 8, a social media post from GameStop CEO Ryan Cohen sparked speculation over GameStop's interest in cryptocurrency. Cohen posted a picture on X with Strategy (MSTR) CEO Michael Saylor, who has famously hitched his company to bitcoin. It now holds more than 447,000 tokens, per a February filing. 

The strategy has worked out well for Saylor's company with the stock up over 84% in the past year amid a rise in the price of bitcoin. But Wall Street strategists are hesitant to conclude that GameStop investing in bitcoin would mean the stock of the video game retailer has upside. 

"The company's strategy, which has changed about six times in three years, is they're going to buy cryptocurrency and be just like MicroStrategy," Wedbush analyst Michael Pachter told Yahoo Finance on Monday ahead of the earnings release.

He added, "The problem with that thinking is MicroStrategy trades at about two times their bitcoin holdings. If GameStop were to buy all bitcoin with their $4.6 billion in cash and trade at two times [their bitcoin holdings,] the stock would drop five bucks."

Also after the bell on Tuesday, GameStop reported fourth quarter earnings results. The company posted $1.28 billion in net sales for the quarter, markin a 28% decline from the year-earlier period. For the full year, GameStop reported an adjusted EBITDA of $36.1 million, down from $64.7 million seen the year prior. 

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Josh Schafer is a reporter for Yahoo Finance. Follow him on X @_joshschafer.

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