GameStop Explores Cryptocurrency Investment, Gathers Market Interest
Pre-Market Surge on Friday
GameStop (GME) witnessed a 6% pre-market increase on Friday following reports that the video game retailer is contemplating investments in cryptocurrencies, including Bitcoin (BTC-USD). CNBC emphasized that the company's investments are still under consideration and not yet finalized.
Ryan Cohen's Social Media Tease
Speculation about GameStop's cryptocurrency aspirations intensified after a weekend social media post by CEO Ryan Cohen. He uploaded an image with Michael Saylor, CEO of Strategy (MSTR), a company known for its significant Bitcoin holdings.
Strategy's Bitcoin Success
Strategy has embraced Bitcoin, amassing over 447,000 tokens. The company's stock has surged by approximately 370% over the past year, fueled by Bitcoin's near 100% appreciation during that period.
Investors' Expectations
GameStop's share price surge post-Cohen's post suggests that investors are anticipating the company to emulate Strategy's Bitcoin investment strategy. As per Luke Kawa of Sherwood, "Traders are hoping that Cohen uses some of GameStop's $4.6 billion in cash to invest in Bitcoin."
GameStop's Investment Authority
In December 2023, GameStop's board authorized Cohen to utilize the company's capital for investments. This allows the video game retailer to operate like a holding company, similar to Daily Journal (DJCO) or Berkshire Hathaway (BRK-B, BRK-A).
Recent Performance
GameStop's stock has declined since its peak of $64 per share in May 2024 and is currently about 15% lower than the previous month. The company is yet to disclose its fourth-quarter earnings.