GameStop (GME) roared back to life during the pandemic when a swarm of retail traders on social media turned the struggling video game retailer into a cultural phenomenon.
What began as a meme-fueled rebellion turned into a lifeline for the nearly bankrupt game retailer that many on Wall Street had written off.
Nearly five years after the height of meme mania, GameStop has quietly repositioned itself.
No longer the poster child of speculative trading, the company is building something closer to a Berkshire Hathaway-style balance sheet: a fortress of cash and optionality.
That evolution hasn’t gone unnoticed by some early believers.
Donatas Macinskas, an investment strategist who spotted GameStop before the Reddit frenzy, told InvestorsObserver that the company’s financial discipline and shareholder-friendly warrant “dividend” program give it a unique edge.
In his view, GameStop is leveraging its newfound stability to raise capital and pivot toward a holding model that could eventually resemble a modern-day Berkshire.
A look behind the numbers
GameStop’s transformation has first hinged on its ability to harness retail enthusiasm to raise capital while cutting operational costs.
After years of decline, the company has successfully stabilized its legacy business, selling video games, consoles, and collectibles through its network of stores and e-commerce platform.
While it’s no longer a high-growth retailer, it’s also no longer bleeding cash. And the turnaround shows up in the numbers.
Last quarter, GameStop posted $66 million in operating profit and $168.6 million in net income. On a per-share basis, earnings surged 675% compared to a year ago.
At the same time, the company maintains a surprisingly large physical presence, which should quell any rumors that it’s merely looking to cash in on another meme frenzy.
As of February 2025, it operated 3,203 stores worldwide, including 2,325 in the U.S., with the rest across Canada, Australia, and Europe. Combined with e-commerce, they contributed $972.2 million in net sales in Q2.
While management hinted at “significant” store closures in the coming years as part of an efficiency push, the company isn’t abandoning its retail base.
Those locations still serve as important customer touchpoints and logistics hubs.
The company’s greatest asset, however, is its balance sheet. By the end of the second quarter, GameStop held $8.7 billion in cash and 4,710 bitcoins (valued at roughly $574 million).
Together, those holdings represent about 88% of its $10.44 billion market cap.
Unlike speculative tech firms chasing hype, Chairman Ryan Cohen framed GameStop’s bitcoin position as a “hedge against inflation and global money printing,” not a pivot toward becoming another 'Strategy Inc.'-style crypto play.
Few companies outside the financial sector hold that kind of liquidity.
As Macinskas told InvestorsObserver, it gives CEO Ryan Cohen the freedom to act selectively, waiting for the right opportunities rather than chasing quick wins.
GME’s zero-interest debt strategy
In June 2025, GameStop completed a $2.25 billion private offering of 0% convertible senior notes due 2032, granting underwriters an option to purchase an additional $450 million, bringing the total to $2.7 billion if fully exercised.
This followed an earlier $1.3 billion issuance of convertible notes due 2030, raising GameStop’s total 2025 convertible offerings to about $3.5 billion, or up to $4.2 billion if all overallotment options are exercised.
Convertible notes can raise concerns about dilution because holders can eventually exchange debt for equity if the stock trades above a set price. But for now, the conversion prices remain well above today’s level.
Until conversion becomes attractive, the notes function as zero-interest debt, offering effectively cheap capital sitting idle as a strategic reserve.
The result is a war chest that gives the company remarkable flexibility. Rather than chase risky acquisitions or hype-driven ventures, the company is taking a patient, value-oriented approach.
It’s a philosophy that mirrors Buffett’s playbook: build a cash pile, wait for mispriced opportunities, and strike when everyone else is scrambling for dry powder.
With that financial foundation in place, GameStop has turned to a new way to reward shareholders while keeping its balance sheet flexible: a warrant dividend.
GME version of “dividends”
Last month, the company granted investors one warrant for every ten shares held, about 59 million in total. Each warrant allows holders to buy one share at $32 anytime before October 2026.
If GameStop’s stock trades above $32 before expiration, holders can buy shares at a discount and capture the difference as profit. If the stock remains below $32, the warrants simply expire worthless.
Either way, it’s a cost-free upside lever.
For GameStop, if exercised, the warrants could bring in hundreds of millions of dollars in new capital without resorting to traditional equity offerings.
This is “essentially a free call option for investors — and potential future cash for the company if exercised,” Macinskas said.
“With about 16% of the float sold short, this move also adds a little extra spice to the mix. Short sellers now have to factor in not just the stock, but a fresh layer of optionality sitting in shareholders’ hands,” he added.
The move also makes shorting GME much harder, he added. Roughly 16% of GameStop’s float remains sold short, meaning investors have borrowed and sold shares hoping to buy them back cheaper later.
However, with the warrant dividend, short sellers may need to compensate lenders for the value of those warrants, or risk being caught off guard if the stock rises.
“Short sellers now have to factor in not just the stock, but a fresh layer of optionality sitting in shareholders’ hands,” he added.
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