In what would be a potentially game-changing financial move, GameStop’s board has unanimously approved a plan to invest corporate cash reserves into bitcoin. The company shared its decision during Tuesday’s after-hours trading. This change follows a similar decision made by MicroStrategy and reflects a larger movement among corporate America to consider crypto investments. Following the announcement, GameStop’s stock surged 6% in value, clearly indicating that Wall Street is all in favor of this behavior.
With the planned investment, GameStop is poised to make a major impact. As of February 1, the company already has nearly $4.8 billion in cash on hand. The company’s strong financial position was only bolstered by its calendar-year fourth-quarter net income of $131.3 million. By allocating a portion of its substantial cash reserves into bitcoin, GameStop joins a select group of companies betting on the future of digital currencies.
GameStop’s decision is notable as the largest market indexes are on the cusp of very modest, yet historic, gains. The S&P 500 only gained 0.16%, but it was still a third consecutive positive day for the index. Overall, the Dow Jones Industrial Average closed up just 4.18 points (0.01%). At the other end of the spectrum, the tech-heavy Nasdaq Composite roared higher by 0.46%. At the same time, S&P 500 futures and Nasdaq 100 futures rose 0.1%.
GameStop’s strategic pivot is reminiscent of another high-profile investor, MicroStrategy, which has invested heavily in bitcoin as part of its corporate strategy. The increasing interest in bitcoin by major corporations suggests a shift in how companies are managing their cash reserves and seeking growth opportunities in the digital asset space.
Paul Hickey, commenting on the broader economic data, noted:
"The soft data looks terrible. If you look at the soft data, you'd say we're in a recession right now — especially after today's consumer confidence report — but it's a matter of actions speaking louder than words. When you look at the hard data, we're not seeing nearly the collapse that we're seeing in the soft data."