In a surprise move, GameStop (GME) has announced that it will add Bitcoin to its treasury reserve assets alongside reporting a sharp rise in quarterly profit. The company’s shares have jumped 14% in premarket trading on this news.
GameStop’s decision to invest in Bitcoin is a bold one, especially considering the volatility of cryptocurrencies. However, with the company facing significant challenges in the retail environment and struggling to adapt to changing consumer habits, it may be seen as a desperate attempt to stay relevant.
The addition of Bitcoin to GameStop’s treasury reserve assets could potentially provide a hedge against inflation or market downturns, but it also comes with its own set of risks. The value of cryptocurrencies can fluctuate wildly, and there is no guarantee that the company will not suffer significant losses if the price of Bitcoin drops.
Despite these concerns, investors are optimistic about GameStop’s move into cryptocurrency investing. The company has reported a sharp rise in quarterly profit, more than doubling from $63.1 million to $131.3 million. Revenue fell to $1.28 billion, down from $1.79 billion in the prior-year period.
GameStop ended the quarter with $4.78 billion in cash, equivalents, and marketable securities, which is a significant amount of capital that could be used for various purposes, including investing in Bitcoin. The company has also noted its exit from the Italian market and store closures in Germany as part of its cost-cutting measures.
While GameStop’s decision to invest in Bitcoin may seem like a risk, it could potentially pay off if the cryptocurrency continues to rise in value. However, investors should be aware that this move comes with significant risks, including potential losses due to price volatility or regulatory changes.
As always, it is essential for investors to do their own research and consider multiple perspectives before making any investment decisions. If you’re interested in staying up-to-date on the latest market news and trends, we invite you to sign up for our free daily stock alerts by clicking here.
Key Statistics
- Market capitalization: $12.47 billion
- P/E ratio: 156.10
- EPS (ttm): $0.18
- Insider ownership: 8.49%
- Short interest: 6.91%
Please note that this article is for informational purposes only and should not be considered as investment advice. It’s essential to do your own research before making any investment decisions.
