Strive Urges GameStop to Convert Cash Reserves into Bitcoin

GameStop Receives Proposal to Invest in Bitcoin

GameStop has received a proposal from Strive Asset Management recommending the company convert nearly $5 billion in cash reserves into Bitcoin. Strive claims this move would make GameStop the "premier Bitcoin treasury company in the gaming sector." The investment firm believes this shift could redefine GameStop’s financial strategy and set it apart from other gaming retailers.

The proposal, dated February 24, was signed by Strive CEO Matt Cole. GameStop Chairman and CEO Ryan Cohen acknowledged the letter on social media, posting "Letter received" without further comment. The company has not stated whether it will consider the proposal. GameStop has been tight-lipped about its long-term financial strategies, leaving investors to speculate on its next move.

Source: X

Strive, co-founded by former U.S. presidential candidate Vivek Ramaswamy, promotes corporate strategies focused on shareholder value. The firm argues that Bitcoin is a better alternative to cash, which it calls a "shrinking asset" due to inflation. Strive highlights accounting rule changes that allow companies to recognize unrealized Bitcoin gains as profit, making it a more appealing treasury asset. It claims that holding Bitcoin could strengthen GameStop’s financial position in the long run.

Strive advises GameStop to avoid investing in other cryptos, calling Bitcoin the only “true store of value.” It warns that speculative investments in alternative tokens could harm financial stability. The letter cites GameStop’s failed NFT marketplace as an example of the risks involved in unproven digital assets. Strive argues that sticking solely to Bitcoin would align GameStop with major corporations that have successfully incorporated it into their treasury strategies.

Recommendation to Reduce Retail Presence

Strive suggests GameStop continue reducing its retail footprint. The firm supports the company’s exits from Canada, France, and Germany and urges more store closures. It recommends focusing on e-commerce and AI-driven services instead of maintaining unprofitable physical locations. Strive believes that a leaner GameStop with a strong online presence would perform better in an industry shifting toward digital game sales.

Strive suggests using convertible debt securities and stock offerings to raise more money in order to finance Bitcoin purchases. The company thinks such actions are possible because of GameStop's enormous trading volume. Strive contends that Bitcoin is a long-term inflation hedge due to its limited supply and increasing popularity. It believes that GameStop can embrace the future of digital assets and fortify its balance sheet by investing in Bitcoin.

Source: X

The suggestion is made while Bitcoin is trading below $89,000 after hitting a high of almost $109,000 in January. Due to a $1.5 billion theft on the exchange Bybit, the cryptocurrency market is still erratic. Strive thinks Bitcoin is a wise strategic investment despite market swings. The business points to increased institutional use and clearer regulations as possible factors in the long-term growth of Bitcoin.

A long-term strategy for GameStop has not been presented by CEO Ryan Cohen. But he has indicated that the corporation is moving toward a more streamlined strategy that prioritizes "value-added" items. He fueled speculation that he was interested in Bitcoin earlier this month when he posted a picture of himself with MicroStrategy CEO Michael Saylor. Given Saylor's company's track record of aggressive Bitcoin investing, some have wondered if Cohen would do the same. 

Retail traders continue to hold GameStop's shares in high regard. Little change was seen in after-hours trading, as the company's shares ended the day down 2.36% at $24.32. Analysts and investors are still waiting to see how GameStop would react to Strive proposal. Market valuation and investor opinion may change significantly if GameStop incorporates Bitcoin into its financial plan.