GameStop (GME) shares rose nearly 13% in pre-market trading on Wednesday as the company approved plans to buy Bitcoin (BTC-USD) in cash holdings.
The video game operator said in a release Tuesday that the board “unanimously approved an update to its investment policy to add Bitcoin as a reserve asset to the Ministry of Treasury.”
The announcement comes about a month after CNBC reported that Gamestop is investigating cryptocurrency investments. On February 8, a social media post from Gamestop CEO Ryan Cohen sparked speculation about Gamestop’s interest in Candocurrency. Cohen posted a photo to X along with Strategy (MSTR) CEO Michael Saylor. It currently holds over 447,000 tokens submitted in February.
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This strategy worked well for Saylor’s company as it has surpassed 84% in stocks over the past year amid rising Bitcoin prices. However, Wall Street strategists are hesitant to conclude that GameStop’s investment in Bitcoin means that the stocks of video game retailers have advantages.
“The company’s strategy has changed about six times over three years, and it’s going to be something like micro-strategy, buying cryptocurrency,” Wedbush analyst Michael Pachter told Yahoo Finance on Monday ahead of the revenue release.
He said, “The question of that mindset is micro-strategic trading at about twice as much as Bitcoin Holding. If Gamestop buys all Bitcoin twice with $4.6 billion in cash and trade (Bitcoin Holding) (the stock would drop $5).
Also, after Tuesday’s bell, GameStop reported fourth quarter revenue results. The company recorded quarterly net sales of $1.28 billion, a 28% decline from the previous year. GameStop reported a adjusted EBITDA of $36.1 million for the entire year down from $64.7 million the previous year.
Josh Schafer is a Yahoo Finance reporter. x Follow him at @_joshschafer.
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