On March 25, CNBC reported that the board of directors of GameStop Corporation (GME), a video game retailer symbolic of the “meme stock” movement, announced a plan to start investing in Bitcoin. This event marks a new direction for the company’s financial strategy. This move also aligns GameStop with other companies that use cryptocurrencies as a means of diversifying their balance sheets.
In its fourth-quarter earnings report, GameStop revealed plans to use part of its corporate cash or future debt funds to invest in Bitcoin and stablecoins pegged to the US dollar. The report pointed out that the company’s current investment policy allows investments in specific crypto assets including Bitcoin and US dollar-denominated stablecoins.
The earnings report also highlighted GameStop’s cash position. As of February 1, the company held more than $4.77 billion in cash reserves, far higher than $921.7 million a year ago. This considerable reserve of funds allows the company to flexibly explore potential investments, including digital assets, without affecting operational stability.
As early as February, speculation began that GameStop had become interested in Bitcoin when the company’s CEO Ryan Cohen posted a mysterious photo in which Cohen appeared in the same frame with Michael Saylor, executive chairman of Strategy and a well-known Bitcoin supporter. After the post was issued, GameStop’s stock price rose rapidly. Investors in the company also began to expect GME to quickly get involved in crypto investments.
There are signs that GameStop seems ready to follow Strategy’s steps. A few days before GameStop announced the plan, MicroStrategy CEO Saylor disclosed that Strategy had increased its holdings by another 6,911 Bitcoins, bringing its total holdings to 506,137, accounting for about 2.4% of the total supply of Bitcoin. GameStop’s upcoming crypto strategy may indicate that more and more traditional companies are considering Bitcoin as a treasury reserve asset.
