On Tuesday (March 25), GameStop announced in a press release that its board has unanimously decided to incorporate bitcoin as a treasury reserve asset.
The gaming retail company also disclosed this update to its investment policy in a Form 10-K submitted that same day to the Securities and Exchange Commission (SEC), noting that it may allocate some of its cash or future debt and equity offerings towards bitcoin investments.
“We have not established a maximum limit on the amount of Bitcoin we might acquire, and we may sell any Bitcoin we purchase,” said GameStop in the Form 10-K.
The filing indicated that GameStop’s bitcoin strategy is untested and could potentially fail, and the company is actively assessing the associated risks and benefits.
“Historically, the Bitcoin markets have been subject to significant price volatility, limited liquidity, low trading volumes, relative anonymity, and potential risks of market manipulation and abuse, along with compliance and internal control challenges at exchanges, all inherent to its completely electronic, decentralized structure,” GameStop added.
This announcement coincided with the release of the company’s fourth quarter and fiscal year 2024 results, and GameStop stated that it would not host a conference call that day.
For fiscal year 2024, the company reported net sales of $3.823 billion, a decline from $5.273 billion the previous year. Its net income rose to $131.3 million, up from $6.7 million in fiscal year 2023.
In the fourth quarter, GameStop completed its exit from Italy and wound down operations in Germany, according to the earnings report released on Tuesday.
As reported by PYMNTS in December, GameStop has been grappling with challenges as it adjusts to the growing trend of digital distribution and shifts in consumer behavior.
GameStop CEO Ryan Cohen has been focused on reducing costs and streamlining operations in an effort to revive its struggling physical stores, as noted by CNBC on Tuesday.
The report highlighted that GameStop’s initiative to invest corporate cash in bitcoin is reminiscent of MicroStrategy’s approach, which has transformed into a widely recognized strategy. MicroStrategy experienced a rapid yet volatile increase in its stock value after investing heavily in bitcoin, becoming the largest corporate holder of the cryptocurrency.
