GameStop, the video game retailer that became a meme stock sensation, is reportedly considering investing in bitcoin and other cryptocurrencies. Sources familiar with the matter revealed that GameStop is exploring investments in alternative asset classes, with a particular focus on crypto and bitcoin. The news of GameStop’s potential foray into the world of digital currencies caused the company’s stock to surge by as much as 20% in extended trading.
While GameStop has not made a final decision on whether to proceed with these investments, the company is actively evaluating if such a move aligns with its overall business strategy. CEO Ryan Cohen recently sparked speculation about GameStop’s interest in crypto when he posted a photo on social media with Michael Saylor, the co-founder and chairman of MicroStrategy, a prominent corporate holder of bitcoin. However, sources indicate that Saylor is not currently involved in GameStop’s discussions about crypto investments.
Interestingly, GameStop had previously dipped its toes into the world of cryptocurrencies in 2022 by launching crypto wallets for users to manage their digital assets. However, the company discontinued the service in 2023 due to regulatory uncertainty. With Cohen, a co-founder of Chewy, at the helm, GameStop has been focusing on cost-cutting measures and operational efficiencies to drive profitability, despite challenges in adapting to evolving consumer trends in the gaming industry.
Under Cohen’s leadership, GameStop has accumulated a significant cash reserve of $4.6 billion as of November 2023. The company has been actively seeking opportunities for investments, as evidenced by a new “investment policy” approved by its board in December 2023. This policy allows Cohen and other designated board members to manage GameStop’s portfolio of securities investments, subject to specific guidelines and approval processes.
If GameStop decides to add bitcoin to its balance sheet, it would be following the footsteps of MicroStrategy, which has made substantial investments in bitcoin in recent years. This strategic shift has repositioned MicroStrategy as a bitcoin holding vehicle, leading to a surge in its stock price. As GameStop navigates the potential foray into cryptocurrencies, the company continues to face challenges in modernizing its business model and adapting to the changing landscape of the gaming industry.
