GameStop Confirms Plans to Invest in Bitcoin. The Stock Is Climbing.
GameStop has approved adding Bitcoin to its balance sheet, confirming speculation as the company explores new growth avenues.
3 min
Videogame seller and meme stock GameStop said its board approved adding Bitcoin as an investment.
The company announced its board unanimously approved an update to its investment policy to add Bitcoin as a treasury reserve asset. In a filing, it said “a portion of our cash or future debt and equity issuances may be invested in Bitcoin” and that it had not set a maximum on the amount of Bitcoin it could accumulate or sell. The move had been the subject of recent speculation as GameStop seeks new sources of growth.
For the fourth quarter ended Feb. 1, GameStop reported net sales of $1.28 billion, below the $1.48 billion analysts surveyed by FactSet had expected.
Adjusted earnings of 29 cents a share beat the 8 cents a share analysts expected. Net income of $131.3 million was also above the $33 million expected.
Shares were up 6% in late trading, after closing down 0.8% on Tuesday, at $25.80. Shares traded as low as $24.99 intraday, down 2.4%, the largest intraday percentage decline since March 12, according to Dow Jones Market Data.
Analysts and investors have been more interested in updates on the company’s strategic direction than its earnings results, as GameStop faces questions about the profitability of its core business. It has been closing physical stores and expanding beyond videogames amid the continuing shift to digital gaming.
The company said it completed its divestiture in Italy and the wind-down of store operations in Germany.
For the full fiscal year ended Feb. 1, GameStop reported net sales of $3.82 billion, below the $4.02 billion expected.
Net income of $131.3 million and earnings of 33 cents a share both beat analysts’ expectations.
GameStop stock has risen 64% over the past 12 months, in part because of the return of investor Keith Gill, also known as “Roaring Kitty,” who said in a YouTube livestream in June 2024 that he is still a “ believer ” in GameStop. The shares are down 19% this year through Tuesday’s close.
“Roaring Kitty’s” social media posts helped fuel the meme stock frenzy in early 2021, pushing GameStop’s stock to its record high of $86.88 on Jan. 27, 2021.
Michael Pachter, a managing director at Wedbush Securities and former CEO of Take-Two Interactive Software who specializes in the videogame sector, said the company’s recent moves into trading cards was unlikely to be the catalyst that would turn around the core business.
“It is unfathomable that they will ever turn their core business (selling games) around by offering trading cards in their stores,” he told Barron’s in an email. When GameStop announced it was getting into the collectible trading cards business last October, he noted the company’s “utter lack of competitive advantage” in the “wildly fragmented” business.
“The company has once again accelerated store closures in an attempt to save its way to prosperity, and its plans to enter the trading card business and to invest in cryptocurrency are striking in their lack of specificity,” Wedbush analysts led by Pachter wrote in a research note Monday.
They said that GameStop’s entry into trading cards and crypto followed its last two attempts at a turnaround, and that its shares “trade at a level that ignores the company’s many challenges ahead.” They called its entry into cryptocurrency “an unsubtle attempt to emulate the success of MicroStrategy , which trades at less than 2x the value of its Bitcoin holdings.” They reiterated their Underperform rating and their 12-month price target of $10.
“Far more likely, they will continue to slowly liquidate by selling off assets” and by closing stores when their leases expire, Pachter said Monday. “That leaves them with ‘profits’ on investment income from their $4.6 billion cash hoard, which they raised by virtue of their meme stock status.”
GameStop management doesn’t hold conference calls to discuss results, and because few analysts follow the company, the consensus forecast as tracked by FactSet includes just two estimates.
Based in Grapevine, Texas, the company offers games and entertainment products online and in stores in the U.S., Canada, Australia, and Europe.
Pachter noted that GameStop’s stock price, trading around 2.5 times cash, suggests investors have faith in CEO Ryan Cohen’s ability to pick investments for them.
In February, Cohen posted a photo of himself on social media with Michael Saylor, co-founder and executive chairman of MicroStrategy, the largest institutional holder of Bitcoin , apparently helping to fuel the rumors about GameStop’s own crypto ambitions.
“MicroStrategy trades as around twice the value of its Bitcoin holdings, so it remains to be seen if Ryan Cohen can find a better cryptocurrency to invest in and drive GME share to 2.6 times the value of its assets,” Pachter said.
On March 3, GameStop announced a deal with digital financial services company Zip Co. to let U.S. customers pay in installments for their online and in-store gaming purchases.
Zip U.S. CEO Joe Heck said at the time that nearly 84% of Zip’s U.S. customers shop for gaming and accessories at GameStop. “Gaming is one of Zip’s most popular categories overall, making Zip an ideal partner for helping these shoppers responsibly purchase goods and services from one of the industry’s fan-favorites and top businesses.”
Copyright 2020, Dow Jones & Company, Inc. All Rights Reserved Worldwide. LEARN MORE
A long-standing cultural cruise and a new expedition-style offering will soon operate side by side in French Polynesia.
The pandemic-fuelled love affair with casual footwear is fading, with Bank of America warning the downturn shows no sign of easing.
The pandemic-fuelled love affair with casual footwear is fading, with Bank of America warning the downturn shows no sign of easing.
2 minThe boom in casual footware ushered in by the pandemic has ended, a potential problem for companies such as Adidas that benefited from the shift to less formal clothing, Bank of America says.
The casual footwear business has been on the ropes since mid-2023 as people began returning to office.
Analyst Thierry Cota wrote that while most downcycles have lasted one to two years over the past two decades or so, the current one is different.
It “shows no sign of abating” and there is “no turning point in sight,” he said.
Adidas and Nike alone account for almost 60% of revenue in the casual footwear industry, Cota estimated, so the sector’s slower growth could be especially painful for them as opposed to brands that have a stronger performance-shoe segment. Adidas may just have it worse than Nike.
Cota downgraded Adidas stock to Underperform from Buy on Tuesday and slashed his target for the stock price to €160 (about $187) from €213. He doesn’t have a rating for Nike stock.
Shares of Adidas listed on the German stock exchange fell 4.5% Tuesday to €162.25. Nike stock was down 1.2%.
Adidas didn’t immediately respond to a request for comment.
Cota sees trouble for Adidas both in the short and long term.
Adidas’ lifestyle segment, which includes the Gazelles and Sambas brands, has been one of the company’s fastest-growing business, but there are signs growth is waning.
Lifestyle sales increased at a 10% annual pace in Adidas’ third quarter, down from 13% in the second quarter.
The analyst now predicts Adidas’ organic sales will grow by a 5% annual rate starting in 2027, down from his prior forecast of 7.5%.
The slower revenue growth will likewise weigh on profitability, Cota said, predicting that margins on earnings before interest and taxes will decline back toward the company’s long-term average after several quarters of outperforming. That could result in a cut to earnings per share.
Adidas stock had a rough 2025. Shares shed 33% in the past 12 months, weighed down by investor concerns over how tariffs, slowing demand, and increased competition would affect revenue growth.
Nike stock fell 9% throughout the period, reflecting both the company’s struggles with demand and optimism over a turnaround plan CEO Elliott Hill rolled out in late 2024.
Investors’ confidence has faded following Nike’s December earnings report, which suggested that a sustained recovery is still several quarters away. Just how many remains anyone’s guess.
But if Adidas’ challenges continue, as Cota believes they will, it could open up some space for Nike to claw back any market share it lost to its rival.
Investors should keep in mind, however, that the field has grown increasingly crowded in the past five years. Upstarts such as On Holding and Hoka also present a formidable challenge to the sector’s legacy brands.
Shares of On and Deckers Outdoor , Hoka’s parent company, fell 11% and 48%, respectively, in 2025, but analysts are upbeat about both companies’ fundamentals as the new year begins.
The battle of the sneakers is just getting started.
Three completed developments bring a quieter, more thoughtful style of luxury living to Mosman, Neutral Bay and Crows Nest.
A 30-metre masterpiece unveiled in Monaco brings Lamborghini’s supercar drama to the high seas, powered by 7,600 horsepower and unmistakable Italian design.
