GameStop Bitcoin Pivot Spurs Social Media Chatter as Stock Soars 16%

Shares of GameStop (GME) traded 16% greater on Wednesday after the corporate introduced that it might begin shopping for bitcoin (BTC) so as to add to its steadiness sheet.

The gaming retailer reported holding $4.8 billion in money throughout its fourth-quarter earnings on Tuesday. Company CEO Ryan Cohen weeks in the past had teased an curiosity in buying bitcoin for the GME steadiness sheet. He was joined by Matt Cole, CEO of Strive Asset Management — an proprietor of GME through its ETFs, who urged the identical.

Though GameStop on Tuesday reported {that a} portion of its money will go into bitcoin and U.S. greenback dominated stablecoins sooner or later, it didn’t disclose how a lot, or the timing of any buys.

The plan kicked off a speculative frenzy on social media: How a lot bitcoin would Gamestop purchase?

The firm’s allocation will doubtless be important, in accordance with Anthony Pompliano, founder and CEO of Professional Capital Management, who stated that GameStop wouldn’t be going by means of the very bureaucratic board approval course of if it was solely planning on allocating 1-2% of its money into bitcoin.

“Chairman Ryan Cohen is likely to take a big bet on bitcoin as a balance sheet asset,” Pompliano wrote in a observe. “You only put the time and energy to get the change to your investment policy if you are looking to put a material amount of your cash into bitcoin.”

Pomp additionally identified that Cohen presently follows three bitcoin-related accounts on X, which he sees as “behavior of a hardcore bitcoiner.”

According to a ballot posted by Michael Saylor — whose Strategy (MSTR) has spent $33 billion buying greater than 500,000 BTC — on X, his followers consider that GameStop must at the very least maintain $3 billion price of bitcoin as a way to “be respected by Bitcoiners.”

Less clear is whether or not GameStop plans to be as aggressive inn shopping for bitcoin as Strategy. The firm has deployed many artistic fundraise mechanisms to gas its conflict chest, together with debt gross sales. But Strategy’s BTC saga began as a extra humble money reserve of $250 million generated by COVID-era price financial savings.

Gamestop’s share increase could show resilient to bitcoin value swings as a result of the corporate has solely stated it might purchase BTC, however would not but personal any, mused Josh Mandell, a former bond dealer. He referred to as out the perplexing scenario on social media.

“I will not ask anyone to make it make sense,” he stated.