MW Why GameStop is trying to be the next MicroStrategy with its bitcoin move

By James Rogers

GameStop is making bitcoin a treasury-reserve asset, some two years after the company said it would invest in equity securities

With its eagerly anticipated move into bitcoin, videogame retailer and original meme-stock company GameStop Corp. is following in the cryptocurrency footsteps of software company and bitcoin play Strategy, formerly MicroStrategy Inc.

GameStop's $(GME)$ decision to add bitcoin (BTCUSD) to its investment policy as a treasury-reserve asset has been dubbed Strategy "lite" on social media. An aggressive buyer of the cryptocurrency, Strategy (MSTR) has held bitcoin as its primary treasury-reserve asset since 2020.

GameStop has had a tough few years, marked by declining sales and intense competition from digital gaming and streaming. Chief Executive Ryan Cohen, who took the company's reins in 2023, has been busy streamlining the business, embarking on store closures and selling some of its international operations. GameStop closed 590 stores in the U.S. in fiscal 2024, according to a 10-K filing with the Securities and Exchange Commission on Tuesday. As of Feb. 1, 2025, GameStop had a total of 3,203 stores, including 2,325 in the United States.

Related: GameStop finally makes its bitcoin move, and investors seem fired up

Adam O'Brien, CEO of bitcoin exchange Bitcoin Well Inc. (BCNWF) (CA:BTCW), told MarketWatch that diving into the cryptocurrency gives GameStop breathing room. "It gives these companies an opportunity to breathe and figure out how to innovate," he said. "Over the next decade, companies will realize that bitcoin is a safe haven for capital over the long term."

O'Brien noted that GameStop is following in the footsteps of both Strategy and Japanese company Metaplanet Inc. (JP:3350) (MTPLF), which also uses bitcoin as its core treasury-reserve asset.

On Tuesday, Michael Saylor, the executive chair of Strategy, posted a picture of himself and Cohen on X, formerly Twitter. "Welcome to Team Bitcoin, @RyanCohen," he wrote.

Related: GameStop's stock dips after plan to sell some international operations

At this stage, however, full details of GameStop's bitcoin strategy have yet to be revealed. In the 10-K filing, the company said that a portion of its cash or future debt and equity issuances may be invested in bitcoin. "We have not set a maximum amount of Bitcoin we may accumulate, and may sell any Bitcoin we may acquire," the company said. GameStop also acknowledged that bitcoin "is a highly volatile asset and has experienced significant price fluctuations over time."

GameStop is making its bitcoin move at a time when a number of companies, including Robinhood Markets Inc. (HOOD), Strategy and Coinbase Global Inc. $(COIN)$, are looking to reap the benefits of a crypto-friendly Trump administration. President Donald Trump, who is working on his campaign promise to establish a strategic bitcoin reserve, has vowed to make the United States "the crypto capital of the world."

Grapevine, Texas.-based GameStop is no stranger to buzz. Along with movie-theater chain AMC Entertainment Holdings Inc. $(AMC)$, the retailer was at the heart of the meme-stock frenzy in 2021 that sent shares of both companies skyrocketing. AMC subsequently made its own foray into digital assets with the launch of nonfungible tokens, which harness blockchain technology to verify ownership or trade tokens. The movie-theater chain also accepts bitcoin and other cryptocurrencies as a form of payment.

Related: Why GameStop might jump on board the bitcoin bandwagon

GameStop has made outside-the-box moves in the past, too. In December 2023, the company's board of directors approved a new investment policy permitting GameStop to invest in equity securities, among other things. The board gave Cohen the authority to manage the investment portfolio.

GameStop also reported its fourth-quarter results late Tuesday, posting its third consecutive quarterly profit. The company ended the quarter with cash, cash equivalents and marketable securities of $4.775 billion, up from $1.199 billion at the end of the same period last year.

In a note released Wednesday, Wedbush raised its GameStop price target to $11.50 from $10, citing the company's operating profit and its "substantial" cash hoard.

"We admire management's resolve to run the business efficiently, and based upon the results for the quarter, are more confident than we have been in the past that GameStop can achieve breakeven results for the foreseeable future," Wedbush analyst Michael Pachter wrote.

"While it is arguable that the [fourth-quarter] results are not sustainable, we did not expect GameStop to even approach operating breakeven ever again. We were wrong, and it is clear that the company's operations have some value, albeit not as great as its share price suggests."

While Wedbush struck a much less bearish tone than in previous notes, it maintained its underperform rating for the stock.

Related: GameStop's stock rises after CEO Ryan Cohen's social-media post sparks bitcoin chatter

GameStop shares are up 14.5% Wednesday. The stock has risen 123.7% in the last 12 months, while the S&P 500 SPX has gained 9.7%.

-James Rogers

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March 26, 2025 14:16 ET (18:16 GMT)

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