GameStop adds $1.5B Bitcoin to its balance sheet

The video game company experienced an uptick in share price on March 26, the day after it initially announced its Bitcoin investment plan. GME stock climbed nearly 12% to $28.36 but quickly reversed course, plummeting almost 24% to $21.68 the following day.

GameStop remains a heavily watched stock due to its involvement in the 2021 “meme stock” phenomenon, during which retail investors coordinated online to drive up its price.

Store closures spell move away from retail sales to crypto

In other related news, GameStop has closed approximately 1,000 stores worldwide over the past year, according to the companys latest filing, cited by CNN. 590 stores shut down in the United States, while over 330 locations closed across Europe. Nearly 50 stores in Canada and Australia also ceased operations.

As of February 1, per an SEC Form 10-K filing, GameStop had 2,325 stores remaining in the US and 3,203 worldwide, down sharply from its peak of around 6,000 a decade ago. The company has stated that additional closures are expected in the coming months, although it has not specified which locations will be affected.

Retail industry analysts point to changing consumer habits as a major factor in GameStops struggles. More gamers are now inclined to use digital game downloads and streaming services. Outside purchasing consoles, the need for physical game stores is growing thinner by the day, so the company is jumping into other investments like Bitcoin.

Some see the move as an attempt to diversify revenue streams, while others question the rationale behind a video game retailer investing in crypto.

Neil Saunders, an analyst at GlobalData Retail, explained that GameStops Bitcoin investment could be interpreted as an “investment safety” measure rather than a growth strategy.