GameStop is reportedly exploring investments in cryptocurrency and Bitcoin, fueled by CEO Ryan Cohen's interest and the company's growing cash reserves.
GameStop is reportedly exploring investments in alternative asset classes, including cryptocurrencies and particularly Bitcoin, according to three sources familiar with the matter. While the company is still evaluating the strategic fit of these investments within its business model, CEO Ryan Cohen's recent social media interaction with Michael Saylor, co-founder and chairman of MicroStrategy, the largest corporate holder of Bitcoin, has fueled speculation.
GameStop's stock surged as much as 20% in after-hours trading following the news. The company's potential foray into crypto investments comes after it launched crypto wallets in 2022, allowing users to manage their cryptocurrency and non-fungible tokens (NFTs). However, this service was discontinued in 2023, citing 'regulatory uncertainty.' Cohen, co-founder of Chewy, joined GameStop's board in 2021 after acquiring shares in the company in 2020. His e-commerce expertise has raised hopes that he could revitalize the struggling brick-and-mortar retailer. However, GameStop continues to face challenges adapting to evolving gaming spending habits.Under Cohen's leadership, GameStop has prioritized cost reduction and operational streamlining to ensure profitability despite stagnant growth. As of November 2, 2023, the company held a substantial $4.6 billion cash reserve, which has been earmarked for investments. This move aligns with GameStop's newly approved 'investment policy' in December 2023. The policy grants Cohen, alongside two independent board members and designated staff, the authority to manage the company's portfolio of securities investments. Investments must adhere to the policy's guidelines or require approval from the committee through a unanimous vote or the full board by majority vote.It's important to note that while Saylor's involvement with GameStop's previous foray into crypto wallets was significant, he is not currently participating in discussions regarding these potential new investments. GameStop's exploration of crypto investments, particularly Bitcoin, could signal a strategic shift towards diversifying its assets and capitalizing on the growing cryptocurrency market. However, the company's ultimate decision will depend on its thorough assessment of the risks and potential returns associated with this venture
CRYPTOCURRENCY BITCOIN GAMESTOP INVESTMENT CEO MICHAEL SAYLOR MICROSTRATEGY
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