GameStop is Officially Copying Michael Saylors Homework… But Skeptics Say it Won’t Work

Well, it finally happened.

After weeks of speculation on social media, GameStop officially confirmed it’s going the MicroStrategy route… using part of its $4.8 billion cash pile to buy Bitcoin and U.S. dollar-pegged stablecoins. The company announced its board had unanimously approved the move (essentially signaling that its leadership believes buying crypto might be a better use of funds than anything else they’ve tried).

And to be fair, they’ve tried a lot.

GameStop’s business strategy has morphed more times than a Pokémon. In the past few years, it’s cycled through brick-and-mortar retail, a failed NFT marketplace, a short-lived e-commerce push, cost-cutting (when all else fails), and now… Bitcoin. It’s hard to argue this isn’t a company searching for direction.

This latest move closely mirrors the approach made famous by Michael Saylor at MicroStrategy, which has since renamed itself Strategy… a fitting name for a company whose entire “strategy” is hoarding Bitcoin. As of February, Strategy holds more than 447,000 BTC on its books, making it the largest corporate holder of the asset by a wide margin. While it might be laughable that his entire value add to the world is buying Bitcoin under a ticker symbol, that bet has worked (at least for shareholders) with the company’s stock up 84% over the past year as Bitcoin surged above $100,000 before settling back to around $87,000.

GameStop and their CEO Ryan Cohen now want to replicate that playbook. There’s no cap on how much Bitcoin it might buy, and no mention of a broader strategy beyond crypto exposure. But the comparison isn’t perfect.

As Wedbush analyst Michael Pachter pointed out, even if GameStop went all-in and converted its full $4.6 billion in cash into Bitcoin, its stock wouldn't see the same gains. In fact, under similar valuation multiples as MicroStrategy, the stock might actually drop by $5 per share, according to his estimates (not sure what math he did to get here, but ok).

And while GameStop’s Q4 earnings showed a net income of $131.3 million (a clear improvement over last year’s $63.1 million) the bigger picture is still uglier than a ork. Net sales fell 28%, and adjusted EBITDA dropped to $36.1 million, down nearly 44% year over year. A single profitable quarter doesn’t erase years of struggling fundamentals.

Let’s not forget that just a few weeks before this announcement, CEO Ryan Cohen posted a photo with Michael Saylor on X. No caption, no context… just enough to stir up retail speculation. And now after their confirmation this morning, it’s working. The stock is currently up 15% on the news.

Investors clearly still want to believe in the story. But it’s hard to ignore the pattern here… GameStop has changed their strategy multiple times since 2021, and none of them have shown sustainable results. This Bitcoin strategy is clearly just a shot in the dark.

The difference now is that the stakes are higher. They’re using real cash… and a lot of it.

P.S. Just when you thought our beloved congressmen couldn’t get any greasier, one Republican lawmaker decided to YOLO $175k into a stock… right before a major FDIC announcement hit. Lucky timing? Insider edge? You be the judge. We broke it all down inside our recent Stocks.News premium article… click here to check it out ASAP. 

Stock.News does not have positions in companies mentioned.