Stock Price Surges Over 8%! GameStop Confirms Bitcoin Purchase, Begins Transition to Web3?

TradingKey – GameStop announced the purchase of Bitcoin, sending its stock price to soaring over 8%. But what does this really mean?  

On Tuesday, video game retailer GameStop approved a plan to use its cash reserves to buy Bitcoin(BTC). Following the announcement, the company’s stock surged 8.27% in after-hours trading, reaching $25.40.  

GameStop Stock Price Chart, Source: Google.

Similar to GameStop, Hong Kong Asia Holdings Limited disclosed on February 17 of this year that it had purchased one Bitcoin, causing its stock price to nearly double in a single day. This raises the question: Why does a public company’s announcement of Bitcoin purchases trigger a stock price rally?  

When traditional companies buy Bitcoin, it often signals a strategic pivot Web3 or an embrace of cryptocurrency, reflecting investor optimism about the sector’s future growth and relevance. Additionally, the move aligns with the U.S. government’s broader cryptocurrency development strategy, suggesting that the company hopes to capitalize on this growing.  

Michael Pachter, an analyst at Wedbush, commented: "The company’s strategy has changed about six times in three years. Now they’re buying crypto to become a company like Strategy(MSTR)."