GameStop (GME) prepares a high-stakes acquisition that could involve trading its bitcoin assets for a bold bet in the consumer sector.
In an interview with CNBC last week, CEO Ryan Cohen said the company plans to acquire a publicly traded consumer company that is “very, very, very large” — one that could potentially increase GameStop’s valuation into the hundreds of billions. “It’s transformational,” Cohen said. “Not just for GameStop, but ultimately in the capital markets…this is something that really has never been done before.”
The news helped send GME’s stock price up more than 8% on Monday, bringing its year-to-date gain to 25%. This helped recoup much of GME’s losses since the company revealed the purchase of 4,710 bitcoins (worth $428 million at the time) in late May.
Cohen did not disclose the target, but said he was looking for a company with undervalued shares, strong fundamentals and what he called a “sleepy management team.” The goal, he said, is to make the acquired company much more efficient using GameStop’s capital, governance and operational expertise.
What makes Cohen’s ambition noteworthy for crypto investors is that it could mark the end of GameStop’s foray into bitcoin.
Last week, blockchain data showed that GameStop had transferred this entire bitcoin stash (currently worth just $368 million) to Coinbase Prime, raising immediate speculation that the company was preparing to sell these holdings.
When asked if GameStop would liquidate its bitcoin to fund the acquisition, Cohen declined to confirm. “I’m not ready to say that,” he told CNBC, adding that the new strategy is “much more compelling than bitcoin.”
