GameStop Urged to Convert $5B Cash into Bitcoin

GameStop, the popular video game retailer, has been urged by an investor to convert its substantial cash reserves into Bitcoin (BTC). In a letter to the company's CEO, Ryan Cohen, Matt Cole, CEO of Strive Asset Management, suggested that GameStop should use its nearly $5 billion in cash to purchase BTC, a move that could transform the retailer from a "meme stock" to a market leader.

Cole's letter comes on the heels of GameStop's stock price surge, fueled by the Reddit forum WallStreetBets. The company has since taken steps to reduce operating losses and increase income through equity offerings. However, Cole believes that adding BTC to GameStop's balance sheet could be the key to securing the company's financial future.

Cole argues that purchasing BTC would open up new avenues for capital deployment and serve as a hedge against inflation. He suggests that GameStop could follow the example of other companies, such as MARA Holding and Semler Scientific, which have steadily increased their BTC holdings. Strive, Cole's company, has purchased 20,356 BTC.

Cole also notes that companies that have added BTC to their balance sheets have seen their valuations spike in line with the asset's price rally. He believes that both CEOs have a "fiduciary duty" to consider the capital market utility of Bitcoin for their respective companies.

GameStop has previously hinted at adding cryptocurrencies to its balance sheet, but Cole urges the company to focus solely on BTC. He cites convertible debt security applications as a reason for this narrow focus.