GameStop (GME) plans a high-stakes acquisition that could involve a Bitcoin exchange BTC$78,484.64 We're holding for a bold bet on the consumer sector.
In an interview with CNBC last week, CEO Ryan Cohen said the company plans to buy a “very, very, very large” publicly traded consumer company that could boost GameStop's valuation to hundreds of billions of dollars. “It's transformational,” Cohen said. “Not just for GameStop, but ultimately for the capital markets…this is something that has really never been done before.”
GME stock rose more than 8% on Monday on the news, bringing its year-to-date rise to 25%. This would have reversed much of GME's losses since the company revealed its purchase of 4,710 Bitcoins (valued at $428 million at the time) in late May.
Mr. Cohen did not specify his targets, but said he was looking for companies with undervalued stocks, strong fundamentals and what he called “sleepy management teams.” The goal is to leverage GameStop's capital, governance and operational expertise to make the acquired businesses more efficient, he said.
What makes Cohen’s ambition notable for crypto investors is that it could end GameStop’s foray into Bitcoin.
Last week, blockchain data showed that GameStop transferred its entire Bitcoin stash (valued at just $368 million today) to Coinbase Prime, immediately sparking speculation that the company was preparing to sell these holdings.
Asked if GameStop would liquidate Bitcoin to fund the acquisition, Cohen declined to say. “I'm not ready to say that,” he told CNBC, adding that the new strategy is “much more compelling than Bitcoin.”
