GameStop’s (GME) stock surged over 6% in after-hours trading on Tuesday following the approval of a plan to buy bitcoin with its cash holdings. The company’s board has unanimously approved an update to its investment policy, adding bitcoin as a treasury reserve asset.
This move comes about a month after CNBC reported GameStop was exploring cryptocurrency investments. CEO Ryan Cohen’s social media post earlier this year sparked speculation over the company’s interest in crypto, citing Strategy (MSTR) CEO Michael Saylor’s successful adoption of bitcoin.
However, Wall Street analysts remain skeptical about the impact on GameStop’s stock price. Wedbush analyst Michael Pachter warned that buying all $4.6 billion in cash to invest in bitcoin and trading at twice the holdings would lead to a significant drop in the company’s stock value.
In related news, GameStop reported fourth quarter earnings results, posting $1.28 billion in net sales, a 28% decline from the previous year. The company also reported an adjusted EBITDA of $36.1 million for the full year, down from $64.7 million the previous year.
Source: https://finance.yahoo.com/news/gamestop-stock-pops-after-company-confirms-plans-to-buy-bitcoin-204454374.html