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GameStop ditches nostalgia

GameStop just took a page from Michael Saylor’s playbook. 

The video game retailer — the darling of the pandemic meme-stock mania — announced its plans to add bitcoin to its balance sheet, echoing the step that turned MicroStrategy into crypto’s loudest corporate bull. 

Details were thin but the symbolism rang through markets as the stock jumped 6% after hours: GameStop wants to move on from its nostalgic branding and enter the digital investment arena.

The company confirmed the long-running speculation in its Tuesday earnings release, though it hedged the move with careful language. 

“Our bitcoin strategy has not been tested and may prove unsuccessful,” GameStop said in a filing. 

Still, it’s a pivot worth watching. GameStop holds roughly $4.8 billion in cash. 

“What we don’t know yet is how meaningful of a [bitcoin] position Gamestop is going to pursue,” investor Tim Kotzman, who hosts the Bitcoin Treasuries podcast, told me.

“It could be a measured strategy with a portion of their billions in available cash, or it could be an opportunistic and aggressive levered long push similar to Strategy.”

What makes the timing more notable, of course, is President Trump’s embrace of cryptocurrency and the White House’s recent announcement of a bitcoin strategic reserve. 

That said, GameStop’s core business remains mixed.

For the quarter ending February 1, GameStop reported adjusted earnings per share of $0.29, well above expectations for $0.08. Net income reached $131.3 million, above the $63.1 million seen the same quarter a year ago. 

Net sales, however, hit $1.28 billion, below the $1.48 billion expected by analysts surveyed by FactSet and down 28% compared to a year ago.

The question now is whether CEO Ryan Cohen sees bitcoin as a financial asset or a branding exercise. 

MicroStrategy, recently renamed as simply “Strategy,” is an example of a company that’s leaned in all the way, holding some 500,000 bitcoins, more than 2% of the total bitcoin outstanding.

Shareholders, for their part, have been rewarded with an 84% gain over the last 12 months. 

GameStop, meanwhile, has returned 67% in the same stretch.

Not unlike Strategy, though, GameStop trades like a stock with a compelling story rather than a good business.

Maybe that’s the point. 

If nostalgia was GameStop’s first act, bitcoin could be its second. The cryptocurrency adds narrative fuel and potential outsized investment returns, even if the actual business remains lukewarm. 

And in a market where belief is often as important as a balance sheet, it could be potent enough for a lasting turnaround.

Market snapshot:

Elsewhere:

💵 Consumer confidence is dropping. The Conference Boards’s measure for future expectations tumbled 9.6 points to hit 65.2, the lowest mark in 12 years. The survey comes amid concerns on President Trump’s tariff plans and a volatile stock market. (CNBC)

🛢️ Russia’s sanctions could lift soon. And the heads of some of the world’s top energy traders have already said they would be open to returning to the country for business if so. Prior to the war in Ukraine, large Western commodity traders had massive business based in Russia. (Bloomberg)

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🪙 Trump’s family venture wants to get into stablecoins. World Liberty Financial intends to launch a stablecoin backed by short-term US Treasurys, US dollar deposits, and other cash equivalents, according to the company. The token will be issued on the Ethereum network and a Binance blockchain. (WSJ)

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About me:

📰 I’m Phil Rosen, co-founder and editor-in-chief of Opening Bell Daily. I’ve published books, lived on three continents, and won awards for my journalism, which has appeared in Business Insider, Fortune, Yahoo Finance, Bloomberg and Inc. Magazine.

I write our flagship newsletter to prepare you for each trading day, unpacking markets, economic data and Wall Street with analysis you won’t find anywhere else. Feedback? Reply directly to this email, ping me on X @philrosenn, or write me phil@openingbellmedia.com.