GameStop Again Catches Retail Traders' Fancy After Plan To Bulk Up On Bitcoin As Treasury Asset
The move could further increase Bitcoin's appeal at a time when cryptocurrencies are gaining favor among U.S. corporations and policymakers.
FollowGameStop Corp (GME) was the top trending ticker and saw a flurry of trader discussions on Stocktwits on Tuesday after the video games retailer announced a plan to buy Bitcoin as a treasury asset in the future.
The shares of the well-known meme stock jumped over 8% after the announcement in post-market trading hours. The price of Bitcoin (BTC.X) was up 0.5% to $87.387 as of 11 p.m. ET.
GameStop's board has approved adding Bitcoin as a treasury reserve asset, which means the company will now use a portion of its cash or future debt or equity issuances to invest in the cryptocurrency.
The move could further increase Bitcoin's appeal at a time when cryptocurrencies are gaining favor among U.S. corporations and policymakers.
President Donald Trump and his aide and Tesla (TLSA) founder Elon Musk have openly backed cryptocurrencies, with Trump recently signing an executive order to establish a strategic reserve of cryptocurrencies by the government.
GameStop's decision echoes that of Strategy (MSTR), an analytics software company formerly known as MicroStrategy. For years, Strategy has built up Bitcoin reserves and is currently the largest corporate holder of the virtual currency.
On Tuesday, GameStop also reported fourth-quarter results, which were a mixed bag.
Revenue dropped to $1.28 billion from $1.79 billion a year earlier as the video games business faced headwinds from consumers' preference for online downloads and competition from e-commerce platforms such as Amazon.com (AMZN).
However, net income more than doubled to $131.3 million from $63.1 million, thanks to aggressive cost cuts.
GameStop closed 590 stores in the U.S. in the fiscal 2024 and anticipates closing a "significant number" of additional stores this fiscal year.
On Stocktwits, sentiment among retail investors jumped higher in the 'extremely bullish' territory and message volume soared 122% in the past 24 hours.
Several users hoped the stock would "explode" from this point, with one commenting that GME is now a Bitcoin proxy.
On the other hand, at least one user was frustrated by the lack of progress in the underlying business, and another said the stock bump might fizzle out.
An ongoing Stocktwits poll asking retail investor opinion about the real motive behind GameStop's Bitcoin treasury shift shows that 37% of nearly 1,000 respondents believe it’s a “smart money move” to hedge inflation, while 34% think it’s “meme fuel” to hype the stock.
GameStop shares closed at $25.40 on Tuesday and are down 19% year to date.
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