By Emon Reiser
Shares for GameStop rose sharply after the video game retailer posted a rare operating profit for its holiday quarter and said its board approved investments in Bitcoin as a "reserve asset."
The stock rose 15.6% to $29.26 in premarket trading. Ahead of Tuesday's market close, the stock was down nearly 19% year to date.
GameStop on Tuesday reported sharply lower revenue as it continued to close stores due to more games being sold digitally. Revenue for hardware and software were down around 30% each, but collectibles revenue was a bright spot for the company, rising 15% year over year.
"The company is clearly focusing on its most efficient stores, closing around 1,000 stores in 2024 and announcing its withdrawal from Canada and France," Wedbush analysts said.
They note that the company has not yet deployed its $4.8 billion cash hoard and its recent board move means that the company plans invest in Bitcoin, which would impact its interest income.
"For the time being, we are going to assume GameStop can continue to generate $220 million in interest income for the foreseeable future," the analysts said.
GameStop posted a profit of $131.3 million, or 29 cents a share, for its quarter ended Feb. 1, compared with $63.1 million, or 21 cents a share, a year earlier.
Sales were $1.28 billion, compared with $1.79 billion in the year-ago quarter.
Write to Emon Reiser at emon.reiser@wsj.com
(END) Dow Jones Newswires
March 26, 2025 08:04 ET (12:04 GMT)
Copyright (c) 2025 Dow Jones & Company, Inc.
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