Embattled video game and collectibles retailer GameStop has been engaged in a significant turnaround effort with CEO Ryan Cohen at the helm, closing down approximately 1,000 stores worldwide while also recently shuttering its NFT marketplace.
According to CNN, as part of a March 25 regulatory filing, the company announced the planned closure of a “significant number” of additional locations in the near future, although a “specific set of stores has not been identified for closure.”
Further, GameStop announced plans to invest in Bitcoin as a treasury reserve asset, stating that a “portion of our cash or future debt and equity issuances” would be utilized in this fashion.
As a likely result of these two news items concerning GameStop, the company’s stock price ticked upward, reaching a recent high of $29.10 as of 1:30 p.m. ET on March 26 — an increase of 14.57%.
Analysts Issue Mixed Opinions on GameStop Investment in Bitcoin
Analysts and onlookers offered a variety of takes over the proposal for GameStop to add Bitcoin to its holdings.
“What we don’t know yet is how meaningful of a [bitcoin] position Gamestop is going to pursue,” Tim Kotzman, host of the Bitcoin Treasuries podcast, told Inc.’s Phil Rosen. “It could be a measured strategy with a portion of their billions in available cash, or it could be an opportunistic and aggressive levered long push similar to Strategy.”
“The pivot to bitcoin is really a defense against irrelevance,” Neil Saunders, managing director of GlobalData Retail and RetailWire BrainTrust member, told CNN.
Saunders also said it’s “an odd thing as it’s basically saying the strategy isn’t retail but to act as some kind of cryptocurrency investment vehicle.”
Even GameStop itself admitted that the plan was fraught with potential risk, detailing as much as part of its SEC regulatory filing.
“Bitcoin, for example, is a highly volatile asset and has experienced significant price fluctuations over time. Our Bitcoin strategy has not been tested and may prove unsuccessful,” the company stated, per CNBC.
