GameStop Adopts Bitcoin Acquisition Strategy, Approved by Board

GameStop Corporation is venturing into the crypto market with the intention of investing a portion of its multi-billion dollar cash reserve into Bitcoin and stablecoins.

Following a unanimous decision by its board of directors, GameStop disclosed that it will allocate a share of its corporate cash, and potentially future debt issuances, to acquire digital assets such as Bitcoin. This strategy was revealed in GameStop's fourth-quarter earnings report, which indicated that the company's updated investment policy now allows for holding certain cryptocurrency assets. The report explicitly mentioned Bitcoin and stablecoins as part of its new treasury approach.

"The Company's investment policy permits investments in certain cryptocurrency assets, including Bitcoin and U.S. dollar-denominated stablecoins, and if the Company acquires Bitcoin or U.S. dollar-denominated stablecoins, the Company will be exposed to certain risks associated with Bitcoin or stablecoins, respectively."

Upon news breaking of its Bitcoin investment plan, GameStop (GME) stock initially surged over 6% in after-hours trading, but the rally faltered and shares finished the day down 0.82% on March 25.

As of February 1, GameStop's cash reserves exceeded $4.77 billion, according to its Q4 earnings report, providing the company with ample financial leeway to explore crypto exposure.

Although GameStop has not disclosed the exact amount of Bitcoin it plans to purchase, the move reflects a growing trend among corporations to utilize crypto as a reserve asset.

Speculation about GameStop's crypto ambitions began earlier this year when CEO Ryan Cohen posted a cryptic photo with Strategy chairman and Bitcoin advocate Michael Saylor. Despite the post containing no information, speculation that GameStop might be exploring something related to Bitcoin led to a 7% increase in its share price.

Just days later, Strive Asset Management CEO Matt Cole publicly encouraged GameStop to adopt Bitcoin as a reserve asset. In a letter addressed to Cohen, Cole argued that the move could reshape the company's financial future and establish it as a pioneer in the gaming industry.

"We believe GameStop has an incredible opportunity to transform its financial future by becoming the premier Bitcoin treasury company in the gaming sector," he wrote on Feb. 24.