Key Information
- GameStop’s stock rose by 16% after announcing plans to acquire bitcoin to bolster its financial assets.
- The company has declared its intention to invest a part of its $4.8 billion cash reserves into bitcoin and U.S. dollar-denominated stablecoins but has not specified the details of the acquisitions, leading to discussions on social media about the expected investment amounts.
Company Insights
Shares of GameStop (GME) increased significantly on Wednesday following the news that the company intends to stock bitcoin on its balance sheet. The firm revealed its cash holdings during its earnings report last Tuesday. CEO Ryan Cohen recently indicated an interest in bitcoin investments, a sentiment echoed by Matt Cole, CEO of Strive Asset Management, who urged similar actions.
The announcement ignited speculation regarding the extent of the potential bitcoin purchases and the timeline for acquiring them. Anthony Pompliano, from Professional Capital Management, believes that GameStop’s board would not have sought to change their investment policies for a minor allocation of funds, suggesting a more substantial investment plan may be underway.
Pompliano noted, “Chairman Ryan Cohen is likely to take a big bet on bitcoin as a balance sheet asset.”
Michael Saylor, of MicroStrategy, conducted a poll among his followers on social media, hinting that GameStop should consider holding at least $3 billion in bitcoin to gain respect in the bitcoin community.
In contrast, trainer Josh Mandell expressed skepticism about the intricacies of GameStop’s situation on social media, commenting, “I will not ask anyone to make it make sense.”
