GameStop's stock surged more than 14% after the video game retailer announced plans to adopt Bitcoin as a treasury reserve asset. The company, which became a viral sensation among retail traders in 2021, saw its shares climb to $29.12 following the board's approval of the new cryptocurrency strategy.
<u>What to Know:</u>
- GameStop's stock jumped 14% after announcing plans to add Bitcoin as a treasury reserve asset
- The company closed 590 U.S. stores in fiscal 2024 and plans "significant" additional closures in 2025
- GameStop's global store count has fallen from 6,000 a decade ago to 3,203 locations currently
GameStop and Bitcoin Buying Strategy
In a Tuesday filing with the U.S. Securities and Exchange Commission, GameStop outlined its intention to diversify its investment portfolio by adding Bitcoin alongside U.S. dollar-denominated stablecoins.
The company stated that "a portion of our cash or future debt and equity issuances may be invested in Bitcoin." GameStop has not established a maximum limit for Bitcoin accumulation and reserves the right to sell any cryptocurrency it acquires.
"The Board approved the addition of Bitcoin as a treasury reserve asset, alongside US dollar-denominated stablecoins, to diversify the Company's investment portfolio," the filing detailed. This move represents a significant shift in corporate strategy for the traditional brick-and-mortar retailer.
Store Reduction Plan
Simultaneously, GameStop announced plans to accelerate its physical footprint reduction. The same SEC filing revealed the company has "initiated a comprehensive store portfolio optimization review" to identify locations for closure based on market conditions and individual store performance.
This strategic review has already resulted in the closure of 590 U.S. stores during fiscal 2024. The company indicated that while specific locations have not yet been identified for the next round of closures, it "anticipate[s] closing a significant number of additional stores in fiscal 2025."
According to CNN, GameStop has already shuttered approximately 1,000 stores over the past year as part of its ongoing consolidation efforts. The retailer's global presence has shrunk considerably, with current operations encompassing 3,203 locations worldwide—down dramatically from 6,000 stores a decade ago. The United States currently hosts 2,325 GameStop locations.
"We have also initiated a comprehensive store portfolio optimization review which involves identifying stores for closure based on many factors, including an evaluation of current market conditions and individual store performance," the filing explained. The company provided no specific target number for upcoming closures.
The dual announcement highlights GameStop's attempt to navigate changing retail landscapes and explore alternative investment strategies. The Bitcoin treasury plan emerges amid continued store rationalization, suggesting a company in transition seeking new avenues for growth and asset preservation.
Final Thoughts
GameStop's Bitcoin strategy and continued store closures represent a twofold approach to corporate restructuring—embracing cryptocurrency assets while simultaneously reducing its physical retail footprint. The market has initially responded positively to this strategic pivot, though long-term implications remain to be seen.