Troubled video game retailer GameStop (GME) has announced plans to use its excess corporate cash to buy Bitcoin (BTC).
The plan to buy Bitcoin, which has been approved by GameStop’s board of directors, takes a page from the playbook of Strategy (MSTR), which is the world’s largest corporate holder of the cryptocurrency.
GameStop, which is known as a notorious meme stock, is up 11% in premarket trading on news of the Bitcoin plan.
As of Feb. 1 this year, GameStop had $4.80 billion U.S. of cash on its balance sheet. Management said they have not set a ceiling on the amount of Bitcoin they might purchase.
Strategy, formerly known as MicroStrategy, now owns 506,000 Bitcoin worth $44 billion U.S.
The buying of crypto has propelled Strategy’s stock higher, though its shares are volatile.
GameStop’s push into crypto is the latest effort by the company to revive the struggling brick-and-mortar business.
In recent years, GameStop has cut costs and streamlined its operations to ensure the business is profitable.
The company’s brick-and-mortar retail business has been pressured by a move to buy video games online and digital downloads.
Bitcoin, the world’s largest cryptocurrency, has been on a roller coaster ride lately. After hitting an all-time high of $109,000 U.S. in January, its price has fallen to $88,000 U.S.
Along with the crypto announcement, GameStop reported decent fourth-quarter 2024 financial results, saying its net income of $131.3 million U.S. more than doubled from $63.1 million U.S. a year earlier.
Prior to today (March 26), GameStop’s stock had declined 17% this year to trade at $25.40 U.S. per share.
