GameStop shares rose nearly 12% on March 26th after the company announced plans to buy Bitcoin (BTC).
The company plans to fund purchases through debt financing. After the market closed on March 26th, GameStop announced it would offer a $1.3 billion convertible note.
According to the company’s statement, convertible senior notes – debts that can be converted to stocks later – are used for general corporate purposes, including the acquisition of Bitcoin.
“GameStop expects to use net income from its offerings for general corporate purposes, including acquisition of Bitcoin in a manner consistent with GameStop’s investment policy.”
On March 25, the company revealed its plans to use a company’s cash or some of its future obligations to purchase digital assets, including stubcoin, which is imposed on Bitcoin and US dollars. Gamestop’s cash reserve was $4.777 billion on February 1st, compared to $921.7 million a year ago.
According to Google Finance, GameStop shares were closed in NYSE at $28.36, earning 11.65% on the day.
GameStop Stock Performance on March 26th. Source: Google Finance
The company reported net income of $131.3 million for the fourth quarter of 2024, compared to $63.1 million for the fourth quarter of the previous year. Net sales fell by $515 million from the previous year, but the company is actively cutting costs, including closing 590 stores across the US in 2024.
GameStop was once at the heart of the stock trend in the 2021 memes when retailers adjusted for a “short aperture” that spiked the price of the stock. Some hedge funds were closed as a result of losing losses during a short squeeze, with GameStop Meme Stock rising to the “David vs. Goliath” story.
Related: GameStop Purchase Bitcoin “Baking Noodles” in tradfi: swan exec
More companies are adopting a Bitcoin Reserve Strategy
GameStop is following the strategy lead and first added Bitcoin to the Treasury in August 2020. As of December 2024, Strategy stocks have grown 3200% since adopting the crypto strategy.
Metaplanet, a Japanese company that plans to buy 21,000 BTC by 2026, has risen 4,800% in its stock price since it announced the move. In the promotional material, Metaplanet said it had attracted a considerable number of new investors, with market capitalization rising by 6,300%.
Semler Scientific’s stock price skyrocketed after it announced plans to buy Bitcoin.
According to Coingecko, 32 public companies hold BTC on their balance sheets.
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