GameStop may overhaul its asset management strategy by considering Bitcoin investments as suggested by Strive Asset Management's CEO, Matt Cole.
The Issue and Proposal
Matt Cole, CEO of Strive Asset Management, proposed to Ryan Cohen, GameStop's CEO, to invest a significant portion of the company's reserves in Bitcoin. Cole believes this would protect reserves against inflation and increase the company's market value. He argues that now is the ideal time for such investments due to new accounting standards recognizing unrealized Bitcoin gains as profit.
Reaction to the Letter
GameStop shares surged 20% following news of potential Bitcoin investments. However, the company has not made a final decision yet. Cole proposed several strategies for Bitcoin acquisition, including issuing shares and convertible bonds. He referred to companies like Semler Scientific and MARA Holdings, which successfully incorporated Bitcoin into their balance sheets.
GameStop's Future and Cryptocurrency
Under Ryan Cohen's leadership, GameStop has made efforts to optimize its business by closing unprofitable stores. The company has previous experience with cryptocurrencies, having launched a crypto wallet in 2022, later closed due to regulatory uncertainty. Currently, GameStop has $4.6 billion in reserves, and a potential Bitcoin investment would be its biggest venture yet. There are concerns that investing in crypto-assets might weaken the company’s financial stability.
GameStop is carefully considering the possibilities of using cryptocurrencies, but no final decision has been made yet. If the company decides to proceed, it may significantly alter its financial strategy.
