GameStop Enters Bitcoin Market as Stock Rises 11.6%

GameStop GME.N shares are back in focus as the company’s decision to accumulate bitcoin has reignited interest from retail investors in this popular meme stock.

The shares of the video game retailer surged by 11.6% to $28.36 on Wednesday after GameStop announced its plans to invest in bitcoin, amid ongoing struggles to attract customers to its physical stores.

However, the company’s shares fell by 5.5% in after-hours trading following the announcement of a $1.3 billion offering of 5-year convertible notes intended to finance its bitcoin acquisition.

“The company is clearly in tune with its shareholders,” remarked Michael Pachter, managing director at Wedbush. “Investors want GameStop to invest their funds into ventures like bitcoin, and the company is meeting their expectations.”

As of 10 a.m. ET, GameStop ranked as the seventh most traded stock by U.S. retail investors, according to data from J.P. Morgan.

The company’s revision to its investment strategy on Tuesday to include bitcoin as a treasury reserve asset is in line with exchange operator Strategy MSTR.O, recognized as the largest corporate holder of bitcoin.

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There has been speculation on social media regarding the company’s interest in bitcoin since GameStop CEO Ryan Cohen posted a picture with Strategy chairman Michael Saylor on social media platform X last month.

The update to the video game retailer’s investment strategy arrives amid increased attention to digital assets from U.S. President Donald Trump, which has fueled interest in cryptocurrencies.

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It’s uncertain how the investment in bitcoin will significantly impact GameStop’s share value, according to Wedbush’s Pachter.

While exchange operator Strategy trades at approximately double the worth of its bitcoin holdings, GameStop shares are valued at more than two-and-a-half times their cash reserves, Pachter noted.

As of February 3, GameStop reported having $4.77 billion in cash, according to its annual filing.

More than two months after reaching its all-time high of six figures, bitcoin is currently priced around $88,000, down nearly 20% from its January peak.

GameStop’s shares may experience heightened volatility due to their connection to the cryptocurrency, as noted by Capital.com analyst Daniela Hathorn.

The video game retailer’s aggressive cost-cutting measures, which included closing numerous stores, led to a significant increase in net income, reported at $131.3 million in the fourth quarter. However, sales plummeted by approximately 30% to $1.28 billion.

Reporting by Arsheeya Bajwa in Bengaluru; Additional reporting by Shashwat Chauhan, Medha Singh, and Chibuike Oguh; Editing by Shounak Dasgupta and Stephen Coates