GameStop to put corporate cash in bitcoin, mimicking MicroStrategy
GameStop, the popular video game retailer, made headlines on Tuesday with the announcement that its board has approved a plan to invest in bitcoin using corporate cash. This move mirrors a similar strategy employed by MicroStrategy, a software company that has become the largest corporate holder of bitcoin.
The news of GameStop’s foray into cryptocurrencies caused the meme stock to surge more than 6% in after-hours trading. The company confirmed earlier reports that it was considering adding bitcoin and other cryptocurrencies to its balance sheet. With nearly $4.8 billion in cash as of February 1, GameStop has the financial resources to make a significant investment in digital assets.
CEO Ryan Cohen, who has been leading efforts to revitalize GameStop’s business, sees the move as a way to diversify the company’s holdings and potentially benefit from the long-term growth potential of cryptocurrencies. However, GameStop acknowledged the risks associated with investing in volatile assets like bitcoin.
In addition to the cryptocurrency news, GameStop also reported strong fourth-quarter results, with net income more than doubling compared to the same period last year. Investors welcomed the positive financial performance, signaling confidence in the company’s turnaround efforts under Cohen’s leadership.
As GameStop joins the ranks of companies diversifying their treasuries with bitcoin, the cryptocurrency market continues to experience fluctuations in prices. Despite recent volatility, bitcoin remains a popular investment choice for companies seeking to hedge against inflation and diversify their portfolios.
The decision to invest in bitcoin reflects GameStop’s commitment to adapting to changing market trends and exploring new opportunities for growth. With the support of its board and management team, GameStop aims to position itself for long-term success in an evolving digital economy.
