GameStop pressured to bet big on Bitcoin with $5B reserve proposal

GameStop is being pushed to put its money where the future is—Bitcoin. Matt Cole, CEO of Strive Asset Management, sent a letter on February 24 to Ryan Cohen, GameStop’s chairman and CEO, asking the company to convert a huge portion of its $5 billion cash reserve into Bitcoin.

Strive manages exchange-traded funds (ETFs) that hold GameStop stock, and Matt claims this gives his company a “fiduciary responsibility” to advocate for decisions that maximize shareholder value.

“We believe GameStop has an incredible opportunity to transform its financial future by becoming the premier Bitcoin treasury company in the gaming sector,” Matt wrote in his letter. His argument? Holding cash is a losing game. Bitcoin, he claims, would protect GameStop’s reserves against inflation and help the company outpace monetary debasement.

According to Matt’s letter, GameStop has reduced operating losses and offset deficits through interest income from its cash holdings. He said:

“By holding Bitcoin through this worldwide monetary revolution, GameStop can transform its substantial treasury from a slowly shrinking resource into a profit center. The moment is ripe now that new FASB accounting standards recognize unrealized Bitcoin gains as profit.”

GameStop weighs Bitcoin move as stock surges by 20%

Reports of GameStop considering Bitcoin and crypto investments have already sent GameStop shares surging 20% in after-hours trading. A February 14 report from CNBC claimed that GameStop is actively evaluating alternative assets, including Bitcoin.

But the report did stress that the company hasn’t made a final decision and is still determining whether crypto aligns with its long-term strategy.

Matt’s letter outlines a blueprint for how GameStop could execute a Bitcoin play. He suggests issuing at-the-market (ATM) offerings and convertible debt securities to raise capital specifically for Bitcoin purchases.

Letter received.

— Ryan Cohen (@ryancohen) February 25, 2025

The strategy is similar to Strategy’s aggressive accumulation of Bitcoin, a decision that completely redefined the company’s entire financial model.

Matt also points to companies like Semler Scientific and MARA Holdings, which have seen stock rallies after adding Bitcoin to their balance sheets. He said that GameStop is in a prime position to do the same, especially after stabilizing its finances over the last two years. Matt told Ryan that:

“Your stock is uniquely suited to purchasing additional Bitcoin to the benefit of your shareholders given its high trading volume. Continuing to issue new equity through an ATM program can generate capital quickly under favorable market conditions, enabling continued Bitcoin acquisitions.”

Earlier this month, Ryan posted a photo with Michael Saylor, the Bitcoin maxi founder of Strategy, on X (formerly Twitter). While the report did confirm that Saylor isn’t officially advising GameStop, the meeting had the crypto community excited nonetheless.

pic.twitter.com/wlOwEGli6n

— Ryan Cohen (@ryancohen) February 8, 2025

Ryan, who bought GameStop shares in 2020 and joined the board in 2021, has been focused on cutting costs, closing unprofitable stores, and streamlining operations.

And GameStop has experimented with crypto before. In 2022, the company launched a crypto wallet that allowed users to store digital assets and NFTs. But regulatory uncertainty led to the shutdown of the service in 2023.

GameStop’s cash pile stood at $4.6 billion as of November 2, 2023, according to a December securities filing. Under Ryan’s leadership, the company has been strategic with its investments, but Bitcoin would be its biggest gamble yet.

“Allocating treasury resources to cryptocurrencies beyond Bitcoin risks diluting shareholder value, as speculative alternatives can undermine GameStop’s financial stability and potentially impair your ability to raise future financing, including the Bitcoin financing strategies outlined below in Section 4,” said Matt Cole in his letter.

Now GameStop of course is a legend in the meme stock sector, thanks to the rise of Keith Gill (Roaring Kitty) in 2021, who led a retail investor movement through YouTube livestreams and Reddit posts.

Matt thinks: “By adopting a treasury strategy centered on adopting the Bitcoin Standard where Bitcoin is your hurdle rate for capital deployment in pursuit of your corporate mission, GameStop can move beyond “meme” sentiment, forging a stable foundation to drive sustainable shareholder value.”

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