GameStop ( GME ) is planning a high-stakes acquisition that could involve swapping out its bitcoin holding for a bold effort 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 boost GameStop’s valuation into the hundreds of billions. “It’s transformative,” Cohen said. “Not just for GameStop, but ultimately within the capital markets… this is something that’s really never been done before.”
The news helped send GME’s share price higher by more than 8% on Monday, bringing its year-to-date gain to 25%. It has recouped a large portion of GME’s losses since the company announced in late May the purchase of 4,710 bitcoin (worth $428 million at the time)
Cohen did not disclose the target, but said he is looking for a company with an undervalued stock, strong fundamentals and what he called a “sleepy management team.” The goal, he said, is to make the acquired company far more efficient by using GameStop’s capital, management and operational expertise.
What makes Cohen’s ambition notable 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 its entire bitcoin holdings (today worth just $368 million) to Coinbase Prime, raising immediate speculation that the company was preparing to sell those holdings.
Asked if GameStop would liquidate its bitcoin to fund the purchase, Cohen declined to confirm. “I’m not ready to say,” he told CNBC, adding that the new strategy is “much more compelling than bitcoin.”
