GameStop Explores Cryptocurrency Investment, Stock Surges
GameStop (GME) witnessed a surge in after-hours trading, rising approximately 10% on Thursday. This followed a CNBC report indicating the video game retailer's potential investment in cryptocurrencies, including Bitcoin (BTC-USD).
CNBC clarified that GameStop's investment plans are still exploratory and subject to change. Nonetheless, the stock experienced a jump of up to 20% after the bell, although it later retracted some gains.
Social media activity by GameStop CEO Ryan Cohen ignited speculation about the company's interest in cryptocurrency. Cohen shared an image on Twitter with MicroStrategy CEO Michael Saylor, who has established his company as a significant Bitcoin treasury.
MicroStrategy has acquired over 447,000 Bitcoins, leading to a surge in its share value by approximately 370% over the past year. Following Cohen's tweet, Sherwood's Luke Kawa observed that investors might anticipate GameStop adopting a similar Bitcoin buying strategy.
In December 2023, GameStop's board authorized Cohen to utilize the company's capital for investments. This move paralleled the operating models of holding companies like Berkshire Hathaway and Daily Journal.
Despite reaching a high of $64 per share in May 2024 during the meme stock revival, GameStop's shares have declined by 15% over the past month. The company's fourth-quarter earnings announcement is pending.