GameStop, the struggling video game retailer, is exploring investments in alternative asset classes, particularly cryptocurrency and bitcoin, according to reports. The company is still in the process of determining if these investments align with its business strategy. Shares of GameStop soared as much as 20% in extended trading following the news.
GameStop, the struggling video game retailer, is exploring investments in alternative asset classes, particularly cryptocurrency and bitcoin, according to three sources familiar with the matter. The company is still in the process of determining if these investments align with its business strategy, one source revealed.
Last weekend, GameStop CEO Ryan Cohen sparked speculation by posting a photo on X (formerly Twitter) with Michael Saylor, the co-founder and chairman of MicroStrategy, a company known for its massive bitcoin holdings.While GameStop's interest in crypto is generating excitement among investors, it's important to note that the company could ultimately decide against pursuing these investments. GameStop is carefully evaluating the potential risks and rewards, seeking to ensure any move aligns with its long-term financial goals. Notably, Saylor is not currently involved in GameStop's discussions regarding crypto investments, two of the sources clarified.This exploration comes after GameStop previously launched crypto wallets in 2022, allowing users to manage their crypto and non-fungible tokens (NFTs). However, the company shut down this service in 2023, citing regulatory uncertainty. Cohen, who co-founded Chewy and joined GameStop's board in 2021, has been leading an effort to modernize the company and adapt to changing consumer habits. Under his leadership, GameStop has focused on cost reduction, operational streamlining, and accumulating a substantial cash reserve of $4.6 billion as of November 2, 2023. This cash pile is being strategically deployed for investments, as outlined in a December securities filing. GameStop's board approved a new investment policy in December 2023, granting Cohen, along with two independent board members and other designated staff, the authority to manage the company's securities portfolio. Any investments must adhere to the policy's guidelines or require approval through a unanimous vote by the committee or a majority vote by the full board
Finance Technology GAME STOP Cryptocurrency Bitcoin Investments Ryan Cohen Michael Saylor Microstrategy
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