Video game company GameStop is reportedly looking into investing in Bitcoin and other cryptos. Insiders say GameStop is assessing various investment opportunities, particularly in alternative assets like crypto, with a strong focus on Bitcoin. Following these reports, GameStop’s stock surged by nearly 20%.
Despite the buzz, GameStop has not yet made a final decision. The firm is still assessing whether such investments align with its overall business strategy, according to one source familiar with the situation.
Further raising speculation, Ryan Cohen, GameStop CEO, posted a photo on X alongside Michael Saylor, the co-founder of MicroStrategy, a company known for its extensive Bitcoin holdings. However, according to two sources, Saylor is currently not involved in GameStop’s discussions regarding cryptocurrency investments.
GameStop has dipped its toes into the cryptocurrency space before. In 2022, the company introduced crypto wallets that allowed users to store and manage non-fungible tokens (NFTs) and cryptocurrencies. However, the service was discontinued in 2023 due to regulatory uncertainties.
Cohen, who is also the co-founder of Chewy, became involved with GameStop in 2020 after purchasing shares in the company. In 2021, he joined the board during a period when GameStop was at the center of a retail trading frenzy. Investors were optimistic that his expertise in e-commerce could help transition into a more modern business model. However, the firm continues to face challenges as it adapts to shifting habits among gamers.
Since taking on the leadership role, Cohen has prioritized cost-cutting measures and operational efficiency to keep GameStop profitable, even as its overall growth remains limited. As of November 2, the firm had built up a significant cash reserve of $4.6 billion. According to a securities filing from December, GameStop is using these funds for strategic investments.
If GameStop decides to add Bitcoin to its balance sheet, it would be following a path similar to that of MicroStrategy. The latter, which recently rebranded as Strategy, has spent years accumulating billions of dollars’ worth in Bitcoin, shifting its identity from a software company to a major Bitcoin investment vehicle. This move has led to a dramatic rise in Strategy’s stock value, albeit with considerable volatility.
In 2023, GameStop’s board passed a new policy, granting Cohen, along with two independent members of the board and key company personnel, the authority to oversee the company’s investment portfolio. Potential investments must follow the rules of the policy or be approved by the board as a whole by a majority vote or by the committee by a unanimous decision.
As more firms pivot into the crypto space, the entire industry, including entities like BitFuFu Inc. (NASDAQ: FUFU), will benefit from the ramped up activity within the crypto space since more players mean the industry is deepening its reach.
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