GameStop Studies Bitcoin Investment Possibilities
Video game retailer GameStop is planning to expand into cryptocurrency investments, with a specific focus on Bitcoin, according to three sources close to the matter according to CNBC. The company's stock jumped 20% in after-hours trading following the news.
The potential investment strategy comes after GameStop CEO Ryan Cohen was seen meeting with Michael Saylor, chairman of MicroStrategy, the company that holds the largest corporate Bitcoin portfolio. While Saylor is not currently involved in GameStop's cryptocurrency discussions, the meeting has drawn attention to the retailer's interest in digital assets.
GameStop's move follows its previous venture into the cryptocurrency space. In 2022, the company launched digital wallets for cryptocurrency and NFT management, though this service was discontinued in 2023 due to regulatory concerns. The new investment consideration represents a different approach to entering the digital asset market.
The company has built up significant financial resources for potential investments. As of November 2, GameStop reported $4.6 billion in cash reserves, according to December securities filings. In preparation for new investment opportunities, the company's board approved an updated investment policy in December 2023, giving Cohen and two independent board members authority to manage the company's investment portfolio.
The trend of large companies diversifying into Bitcoin marks a shift in institutional thinking about digital assets. As more corporations follow MicroStrategy's example, we're witnessing a broader movement toward financial autonomy through decentralized networks. This development could reshape how companies approach treasury management and monetary sovereignty in the digital age.
If GameStop proceeds with Bitcoin investments, it would follow MicroStrategy's approach. Recently rebranded as Strategy, MicroStrategy has purchased billions in Bitcoin, transforming itself from a software company into a Bitcoin investment vehicle. Strategy currently holds approximately $47 billion worth of bitcoin, representing about 2.5% of the total supply.
The final decision on cryptocurrency investments remains pending. Sources indicate GameStop is still evaluating whether such investments align with their business strategy. The company could choose not to proceed with the investment plan after their assessment is complete.
