GameStop Posts Narrower Loss in Q2 as Bitcoin Holdings Lift Balance Sheet

GameStop narrowed its quarterly loss after booking $528 million of Bitcoin on its balance sheet, a move that ranks among the largest corporate wagers on the crypto since Strategy’s headline-grabbing buys.

The Grapevine, Texas-based company reported a net loss of $18.5 million for the quarter ended August 2, compared with a $44.8 million profit in the prior three months. 

Revenue slipped to $673.9 million from $732.4 million in the previous quarter, weighed by declines in hardware and software sales.

GameStop disclosed that it purchased 4,710 BTC during the quarter at a cost of $500 million, in line with an investment policy adopted earlier this year. 

The holdings were valued at $528.6 million at quarter-end, generating an unrealized gain of $28.6 million. The company said it uses Coinbase pricing to measure fair value each reporting period, its filing showed.

The addition of Bitcoin places GameStop among a small but growing group of publicly traded firms that have diversified into digital assets, exposing their financial statements to swings in crypto markets. 

Bitcoin’s price has risen about 18% since early May, helping bolster the carrying value of GameStop’s holdings.

The retailer has been reshaping its finances under Chairman Ryan Cohen, raising cash through a $2.7 billion convertible bond sale earlier this year and divesting international units in Canada and France. 

GameStop ended the quarter with $6.1 billion in cash and equivalents, excluding its digital assets.

Operating losses narrowed to $9.2 million from $10.8 million in the previous quarter, aided by lower selling, general, and administrative costs. 

Collectibles, including trading cards and pop-culture merchandise, remained a bright spot, accounting for nearly a third of sales.

Shares of GameStop were up 1.5% on the day and as much as 5.7% to $24.94 in after-hours trading following the release.