GameStop Corp. has formally joined the cryptocurrency craze, acquiring 4,710 bitcoins worth $512.6 million. On Wednesday, GameStop continued its bold gambit by announcing the purchase of digital currency. They ended up buying bitcoin at roughly $108,837 per bitcoin. This strategic move is the company’s first investment in bitcoin, and it’s part of the company’s overall strategy to adopt cryptocurrency.
Today’s proposed acquisition fits exactly within GameStop’s existing plans to improve its financial situation, strengthen its balance sheet, and further diversify into the investment space. Since late March, the big box retailer has launched a cryptocurrency buying scheme. Making this move is a dramatic departure from its previous operational strategy and made possible under the leadership of its new CEO, Ryan Cohen. The tech firm has no upper bound on the amount of bitcoin it can buy. This demonstrates their willingness to lead and push for additional investments within the developing asset space.
As of February 1, GameStop had a cash hoard of $4.76 billion. This major infusion provides Insignia with significant liquidity to execute on its newly focused investment strategy. The decision to invest in bitcoin mirrors similar initiatives undertaken by companies like MicroStrategy, which have made headlines for their significant allocations in cryptocurrency.
Despite this news, which is as yet unconfirmed, its stock price rose significantly following GameStop’s bitcoin purchase announcement. Shares skyrocketed 3% in premarket trading following the news! Year-to-date, GameStop’s stock is up approximately 12%, reflecting growing investor confidence in the company’s direction.
GameStop’s pivot towards cryptocurrency fits perfectly within the company’s larger aim to become profitable by reducing expenses and improving efficiency across the board. With the consumer shift toward all things digital, the company is positioning itself to compete in an evolving marketplace landscape and a more digital consumer economy. Bitcoin’s value has exploded in the past year, recently reaching an all-time high near $112,000. We hope this encourages GameStop to build upon the booming interest in cryptocurrencies.