Wall Street rebel GameStop explores Bitcoin investment after CEO meets with Michael Saylor
Strategy's co-founder Saylor has no part in the company's crypto talks.
Key Takeaways
- GameStop is considering investing in Bitcoin and other digital assets, though no decision has been made.
- GameStop's Bitcoin talks come at a time when the firm is facing operational challenges.
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Just days after GameStop CEO Ryan Cohen and Bitcoin bull Michael Saylor met, news has surfaced that the company is now considering adding Bitcoin and other crypto assets to its portfolio.
CNBC reported Thursday, citing three sources, that GameStop is setting its sights on digital asset investment. The video game retailer, best known for the historic 2021 short squeeze, had around $4.6 billion in cash reserves at the close of Q3 2024, according to its latest SEC filing.
Saylor, however, is not part of the company’s internal conversations about crypto, sources noted, at least at this stage. And even with these discussions underway, the company may ultimately decide against any investments.
Can Bitcoin save GameStop from its retail struggles?
GameStop is exploring Bitcoin and crypto investments after grappling with a 20% drop in sales during the third quarter of 2024, despite sitting on a $4.6 billion cash pile. The gaming retailer’s hardware and software segments both underperformed compared to the previous year.
The company’s brick-and-mortar business model faces mounting pressure as digital game downloads continue to reshape the gaming retail landscape.
According to a Seeking Alpha analysis, GameStop’s declining core business could make it well-positioned to pivot toward becoming a “Bitcoin Consumer Bank,” potentially boosting its stock value.
GameStop shares (GME) soared as much as 20% on the recent Bitcoin report, per Yahoo Finance.
The retailer has previously ventured into digital assets, launching an NFT marketplace in July 2022 for trading digital collectibles. However, GameStop scaled back this initiative in early 2024, citing “regulatory uncertainty.” The company also discontinued its crypto wallet service in late 2023 amid regulatory concerns.
Last January, GameStop’s board approved a revised investment policy, giving CEO Ryan Cohen and his team broader authority to invest in equities and other assets, expanding beyond their previous limitations to short-term, investment-grade income securities.
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