GameStop (GME) has purchased $513 million worth of Bitcoin (BTC) as the struggling video game retailer moves to capitalize on the popularity of cryptocurrencies.
Elevate Your Investing Strategy:
- Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence.
GameStop said in a regulatory filing that it bought 4,710 BTC, although it did not disclose the dates when the purchases were made. Bitcoin is currently trading right around $109,000, not far from its record high. The acquisition marks GameStop’s first Bitcoin purchase since unveiling its plans in March to start investing in crypto.
The company, whose core business of selling video games through a chain of retail stores has struggled for years, is replicating the playbook of Michael Saylor’s Strategy (MSTR), a software company turned serial Bitcoin acquirer whose stock is up 122% in the last 12 months.
Rising Tides
GameStop is hoping that its push into crypto will give its share price a similar lift to Strategy’s stock and attract investors who want exposure to digital assets. The shift in focus comes as GameStop struggles to turn around its fading video game business, which is losing out as consumers increasingly buy games via digital downloads.
Known as one of the original meme stocks, GameStop continues to have a strong following among retail investors, many of whom are also invested in crypto. The company said in its most recent earnings report that it had $4.78 billion of cash on hand at the start of February this year, money it plans to deploy buying cryptocurrencies. GME stock has risen 12% this year.
Is GME Stock a Buy?
Owing to its notoriety as a meme stock, only one analyst currently follows GameStop. So instead we’ll look at the three-month performance of the company’s share price. As one can see in the chart below, GME stock has risen 43.48% in the last 12 weeks.
