GameStop to raise $1.3 billion to buy Bitcoin for its treasury.

GameStop stock reversed in after-hours trade Wednesday after the company announced plans to raise $1.3 billion in bitcoin purchases. Shares of the video game retailer had spiked during Wednesday trade on Q4 earnings and plans to add cryptocurrency as a treasury reserve asset.

Late Tuesday, GameStop (GME) reported earnings of 30 cents per share, exceeding FactSet’s prediction of 8 cents. However, with $1.48 billion in missed views, revenue dropped 28% to $1.28 billion.

At the end of the quarter, marketable securities, cash, and cash equivalents were $4.775 billion. Additionally, GameStop closed down its store operations in Germany and completed the disposal of its assets in Italy.

Bring On Bitcoin

GameStop said in a separate statement on Tuesday that its board had unanimously decided to change its investment strategy to include bitcoin as a treasury reserve asset. According to the 10-K SEC filing, the corporation stated that it may sell any bitcoin it collects and did not specify a maximum amount it may amass.

First authorized in December 2023, GameStop’s investment committee consists of two independent board members, chairman and CEO Ryan Cohen, and advisors selected by the committee. The filing claimed the goal of the investment program is to “provide sufficient liquidity to meet the day-to-day financial obligations of the company and to optimize investment returns.”

Cohen and other committee members might purchase the same securities that the business does, according to GameStop. Because it exposes the directors’ finances to the same risk, the board feels that this investment matches the interests of GameStop and the investment committee.

With the news, GameStop becomes one of the companies that has bought bitcoin as an investment, joining companies like Strategy (MSTR), Coinbase (COIN), and Tesla (TSLA).

GameStop revealed intentions to raise $1.3 billion with a private convertible note sale late Wednesday. Within 13 days of the notes’ issuance date, initial buyers will have the opportunity to buy up to an extra $200 million worth of notes.

According to GameStop, the money raised will be used for ordinary business expenses, such as purchasing bitcoin.

On Wednesday, GME stock increased 11.8% to break over its 50-day line. However, after-hours trading saw an almost 8% decline in shares.

GameStop had its greatest day since June 13, 2024, when its shares increased 14.4%, on Wednesday. Nevertheless, as of Tuesday’s close, GME stock has lost almost 19% this year.

Late on Wednesday, bitcoin was trading at about $87,200. Over the previous week, the cryptocurrency has increased by 1.6%.

What We Know About GameStop & Crypto:

• GameStop has shown interest in blockchain and NFTs in the past (via its NFT marketplace, though it shut down in 2024).
• The company has not announced any major Bitcoin treasury strategy.
• Raising $1.3B would be a significant move, likely requiring an SEC filing or official press release.

What to Watch For:

• Official SEC filings (if GameStop plans to raise capital).
• Statements from GameStop’s CEO or investor relations.
• Reliable financial news sources (Bloomberg, Reuters, SEC.gov).

 

 

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