GameStop (GME, Financial) is reportedly exploring the possibility of investing in Bitcoin and other cryptocurrencies. This news has led to a significant surge in its stock, with after-hours trading showing an increase of over 7%, at one point reaching nearly 19%. Previously, GameStop ventured into the crypto space by launching a digital wallet in 2022, which was later closed in 2023 due to regulatory uncertainties.
Insiders have revealed that GameStop is evaluating alternative asset investments, particularly in cryptocurrencies, though no final decision has been made. The company is assessing whether such investments align with its business strategy. Recently, GameStop's CEO, Ryan Cohen, posted a photo with Michael Saylor, the co-founder and chairman of MicroStrategy (MSTR), a company known for its substantial Bitcoin holdings. However, Saylor is not involved in GameStop's current cryptocurrency discussions.
Ryan Cohen, who began investing in GameStop in 2020 and joined its board in 2021, has been pivotal in steering the company through a transformative phase. Under his leadership, GameStop has focused on cost-cutting and streamlining operations to maintain profitability despite stagnant business growth. As of November last year, the company had amassed $4.6 billion in cash reserves, which it has been using for strategic investments.
In December 2023, GameStop's board approved a new investment policy, empowering Cohen and select board members to manage the company's securities portfolio.
