After knowing this news, Gamestop’s actions rise strongly in the Wall Street premarket, 15%. So far this year, The value had fallen about 20%.
As reported by the company in a press release, a part of its cash, or future debt and capital emissions, could be reversed in Bitcoin and ‘Stablecoins’ called in US dollars. On February 1, Gamestop had almost 4.8 billion dollars in cash. The company also indicated that It has not established a limit for the amount of bitcoin you could buy.
Thus, the company confirms the information published in February by ‘CNBC’, which claimed that Gamestop was exploring investments in alternative assets classes, including cryptocurrencies, with a particular approach in Bitcoin. The company had not made a final decision, since they were evaluating whether their strategy made sense for their business model.
The incursion of Gamestop in cryptocurrencies was interpreted as the last effort of its CEOactivist inverter Ryan Cohen, to revitalize the physical business in decline. Cohen, co -founder of Chewy, bought Gamestop shares in 2020 and joined the Board in 2021, just when the company became one of the main protagonists of the phenomenon of Meme actions.
His experience in electronic commerce generated hope that he could modernize the physical retailer, although the company continues to fight to adapt to changes in players’ consumption habits. Under his leadership, The company cut costs and optimized operations to guarantee the profitability of the company.
What analysis does Gamestop on cryptocurrency volatility
However, the company acknowledged that this Strategy exposes it to the volatility of cryptocurrency prices. “Bitcoin, for example, is a highly volatile asset and has experienced significant price fluctuations over time. Our strategy with Bitcoin has not been tested and could be unsuccessful,” Gamestop warned in a document presented to the US stock and values commission (SEC).
With this movement, The video game retailer follows the steps of the Microstrategy software company, Now known as Strategy, which in recent years invested billions of dollars in Bitcoin, becoming the largest corporate fork in cryptocurrency. This decision promoted a fast, although volatile, increased the price of Strategy shares, which went from being a software company to an investment vehicle in Bitcoin.
However, this was not Gamestop’s first foray into the cryptocurrency market. In 2022, Gamestop launched cryptocurrency wallets that allowed users to manage their cryptoactives and non -fungible tokens (NFTS). However, in 2023, the company closed the service due to the “regulatory uncertainty.”
In December 2023the Gamestop Board approved a new “investment policy”, which allows Cohen, along with two independent members of the Board and other necessary personnel, manage the portfolio of investments in values of the company. These investments must comply with the policy guidelines or receive the unanimous approval of the Committee or the majority of the Board of Directors.
Together with the announcement about cryptocurrencies, Investors also celebrated the increase in the results of the fourth quarter of Gamestop. The company reported a net profit of 131.3 million, more than double the 63.1 million obtained in the same quarter of the previous year.
Source: Ambito
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