GameStop's shares soared by 11.6% to $28.35 before the bell on Wednesday, March 26, 2025, following the company's announcement that it would invest in bitcoin amid struggles in its traditional retail business. This pivot towards digital assets has rekindled interest from retail investors, bringing them back to what has become their beloved meme stock.
On March 25, 2025, GameStop updated its investment policy to include bitcoin as a treasury reserve asset, mirroring the strategy of Strategy, the largest corporate holder of bitcoin. This shift comes at a time when GameStop's brick-and-mortar operations are facing significant challenges in attracting customers. "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," noted Dan Coatsworth, an investment analyst at AJ Bell.
The announcement has created a buzz on social media, particularly after GameStop CEO Ryan Cohen shared a picture with Strategy chairman Michael Saylor on the platform X last month, hinting at the company's growing interest in cryptocurrencies. This change in strategy aligns with a broader trend in the market as U.S. President Donald Trump has also increased focus on digital assets, further boosting interest in cryptocurrencies.
Despite the excitement surrounding this new direction, bitcoin itself is currently trading at around $88,000, which is nearly a fifth lower than its peak earlier this year. This fluctuation in bitcoin's value could mean increased volatility for GameStop's shares, according to Capital.com analyst Daniela Hathorn. However, if the premarket gains hold, GameStop could see its market value rise by more than $1 billion.
In addition to its cryptocurrency pivot, GameStop has been implementing aggressive cost-cutting measures. These efforts have helped the company more than double its net income to $131.3 million in the fourth quarter. However, the company reported a significant decline in quarterly net sales, which fell about 30% to $1.28 billion.
GameStop's move into the crypto space is not just a financial strategy; it reflects a broader transformation as the company shifts from traditional retail to e-commerce under Cohen's leadership. The decision to invest in bitcoin is part of a larger trend where companies are increasingly recognizing the potential of digital assets.
Meanwhile, in a related business development, Dollar Tree announced on the same day that a group of private-equity investors would acquire its Family Dollar business for approximately $1 billion, marking the end of a year-long search for potential buyers for the struggling discount chain.
As GameStop continues to navigate the challenges of a changing retail environment, its foray into bitcoin could be a pivotal moment for the company. The gaming retailer's strategy may not only bolster its financial standing but also redefine its identity in the eyes of investors and consumers alike.
In summary, GameStop's recent actions highlight a significant shift in its business strategy, focusing on digital assets as a way to enhance its market position. This move has sparked renewed interest from retail investors, eager to see how the company's fortunes may change as it embraces the future of finance.
