GameStop GME Stock Jumps 8% on Bitcoin Reserve Move, Despite Lower Sales
The GME stock price has surged higher after the close as GameStop enters the Bitcoin market, despite lower 2024 sales revenue.
Mixed Earnings Report Sends GME Higher
GameStop (GME) posted weaker-than-expected Q4 2024 earnings, but despite a significant drop in revenue, the stock saw a sharp 7% gain in after-hours trading. Shares climbed from $25.44 at the close of the US session to $27.38 before stabilizing at $26.82.
The video game retailer reported a 28.5% year-over-year decline in sales, bringing in $1.283 billion, which fell short of the $1.477 billion analysts had forecasted. The company’s full-year revenue for fiscal 2024 was $3.823 billion, down from $5.273 billion the previous year, reflecting the broader struggles in the gaming retail industry.
However, despite the revenue miss, GameStop delivered stronger profitability metrics. Net income more than doubled from $63.1 million to $131.3 million, while earnings per share (EPS) rose to $0.29, surpassing the expected $0.09 EPS forecast.
GameStop Expands into Bitcoin Reserves
While the financial results were mixed, GameStop’s stock rally was fueled more by its bold move into Bitcoin rather than its earnings report. GME announced that its board unanimously approved an investment policy update to include Bitcoin holdings, confirming weeks of speculation about its potential entry into the cryptocurrency market.
In early February, GameStop CEO Ryan Cohen met with MicroStrategy’s Michael Saylor, a well-known Bitcoin advocate whose company holds an astonishing 506,137 BTC. The meeting sparked rumors that GameStop was planning to add Bitcoin to its balance sheet, and today’s announcement confirmed those speculations.
Market Reaction and Future Outlook
Following the announcement, GME shares surged over 7% to $27.38, before retracing slightly to $26.82, where they have stabilized. The move positions GameStop among a growing number of companies embracing digital assets as part of their corporate treasury strategy.
While GameStop continues to face revenue challenges, its pivot toward Bitcoin could attract new investor interest and provide additional upside momentum. Whether this strategic shift will lead to sustained long-term growth remains to be seen, but for now, GameStop’s stock is showing renewed strength.
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