GameStop Explores Bitcoin Investment Amid Market Volatility

COLOGNE, Germany — GameStop, the video game retailer turned meme stock phenomenon, is reportedly considering investments in Bitcoin and other cryptocurrencies as part of its strategy to diversify its asset portfolio. According to three sources familiar with the discussions, the company is evaluating whether this investment aligns with its business model.

Shares of GameStop experienced a significant jump of up to 20% in extended trading following the announcement of these exploratory talks. However, it remains uncertain whether GameStop will move forward with actual cryptocurrency investments.

GameStop’s CEO, Ryan Cohen, has shown a vested interest in modernizing the company’s operations since he joined the board in 2021. Cohen is also a notable corporate figure in the cryptocurrency space, though there are no indications that he is directly influencing GameStop’s current investment considerations regarding cryptocurrencies, according to two of the sources.

In 2022, GameStop ventured into cryptocurrency by launching wallets allowing users to manage their crypto and non-fungible tokens (NFTs). However, due to regulatory uncertainties, the service was halted in 2023. The company has faced ongoing challenges adapting to shifting consumer preferences in the gaming industry, which have intensified since the COVID-19 pandemic.

Under Cohen’s leadership, GameStop has concentrated on cost reduction and streamlining its operations to sustain profitability despite stagnating growth. As of November 2, 2023, GameStop reported holding approximately $4.6 billion in cash, which it plans to utilize for various investments, as outlined in a December securities filing.

GameStop’s potential foray into Bitcoin aligns with trends seen in other firms that have recently integrated cryptocurrencies into their balance sheets. For example, a company formerly known as MicroStrategy has transformed itself into a significant Bitcoin holding entity, acquiring billions of dollars in cryptocurrency over recent years, leading to a volatile yet rapid upswing in its stock value.

As of December 2023, GameStop’s board sanctioned a revised investment policy, empowering Cohen, along with two independent board members and essential personnel, to oversee the company’s securities investments. Such investments are required to adhere to specific guidelines set forth in the policy, or receive approval from the committee or the full board through a majority vote.

Despite the excitement surrounding potential cryptocurrency investments, GameStop continues to navigate a challenging retail landscape. The company has yet to announce a definitive plan regarding its exploration of Bitcoin, leaving investors and market watchers in anticipation.