Meme stock veteran GameStop rumored to be "stockpiling coins" as founder takes friendly photo with Saylor
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Meme stock veteran GameStop rumored to be "stockpiling coins" as founder takes friendly photo with Saylor
Bitcoin might offer GameStop a new path for growth.
Navigating Web3 tides with focused insightsBy: Mary Liu, BitpushNews
On the afternoon of February 13, New York time, GameStop's stock surged in after-hours trading following news that the company might invest in Bitcoin and other cryptocurrencies.
According to CNBC, citing sources, GameStop is considering investing in cryptocurrencies such as Bitcoin. After the report, its share price soared 20% in after-hours trading before settling around $26.34.
In recent years, GameStop has gained fame as a "meme stock." In 2021, its share price skyrocketed due to the influence of retail investor Keith "Roaring Kitty" Gill, then entered a prolonged decline. In 2024, multiple appearances by Gill reignited a rebound in GameStop's stock. However, despite extreme volatility, GameStop's underlying business performance remains weak.
Poor Performance Puts Pressure on GameStop to Transform
As a brick-and-mortar retailer focused on video games and collectibles, GameStop has struggled amid the industry's broader shift toward digitalization.
Wall Street pays limited attention to GameStop. Wedbush analyst Michael Pachter recently reiterated his "underperform" rating on the stock, setting a target price of $10—implying that, after subtracting cash, the company’s core business value is nearly zero.
Pachter noted: "The company plans to return to growth but faces insurmountable obstacles." GameStop’s core business—physical game sales—is being eroded by digital downloads and cloud gaming, leading to continuous declines in revenue and profit. While cost-cutting and operational optimization have delivered short-term profitability, the long-term growth outlook remains bleak.
Could Bitcoin Investment Be the Turnaround?
GameStop first explored crypto in 2022, launching a cryptocurrency wallet allowing users to manage crypto and NFTs. It also partnered with gaming networks like Immutable to support trading of in-game assets, avatars, and other digital collectibles.
However, due to "regulatory uncertainty," the company shut down its NFT marketplace in early 2024. Despite this, GameStop hasn’t completely abandoned interest in the crypto space.
The current speculation about Bitcoin investment comes shortly after President Trump took office. During his campaign, Trump pledged support for the cryptocurrency industry, which may be one reason GameStop is reconsidering crypto investments.
Notably, GameStop CEO Ryan Cohen was recently photographed with Michael Saylor, co-founder and executive chairman of MicroStrategy, further fueling market speculation.
MicroStrategy is the world’s largest corporate holder of Bitcoin, with over $46 billion worth of BTC reserves. Since beginning its Bitcoin accumulation in 2020, MicroStrategy has earned substantial returns, inspiring more companies to add Bitcoin to their balance sheets.
Luke Kawa, an analyst at Sherwood, pointed out that GameStop’s stock rose after Cohen’s tweet, suggesting investors may be betting that GameStop will emulate MicroStrategy’s Bitcoin-buying strategy.
"The enthusiastic market reaction to Cohen’s tweet indicates traders hope he will use GameStop’s $4.6 billion in cash and cash-like securities to follow Michael Saylor’s approach. (That strategy has only one rule: buy Bitcoin.)"
It remains unconfirmed whether GameStop will officially enter the cryptocurrency arena, but the rumor has undoubtedly opened new speculative possibilities.
$4.6 Billion in Cash Reserves: How Will Ryan Cohen Lead GameStop Out of Crisis?
Ryan Cohen, co-founder of e-commerce company Chewy, began purchasing GameStop shares in 2020 and joined the board in 2021. Under his leadership, GameStop has focused on cost reduction and operational streamlining to ensure profitability, though growth remains sluggish. As of November 2, 2023, GameStop had accumulated $4.6 billion in cash reserves and has been actively deploying this capital.
In December 2023, GameStop’s board approved a new "investment policy" allowing Cohen, two independent board members, and other designated personnel to manage the company’s investment portfolio. Investments must comply with policy guidelines or receive unanimous committee approval or majority board approval.
Although the company currently faces declining performance and industry transformation pressures, Bitcoin—as a high-volatility, high-return emerging asset—might offer GameStop a new growth path. Whether GameStop can stage a successful turnaround through Bitcoin accumulation remains uncertain.
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