GameStop (GME) is planning a high-risk acquisition that could involve trading its bitcoins participations 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 “very, very, very large” publicly traded consumer company, 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 has helped GME’s share price rise more than 8% on Monday, bringing its year-to-date gain to 25%. This has recovered much of GME’s loss since the company disclosed in late May the purchase of 4,710 bitcoins (then worth $428 million).
Cohen did not disclose the target, but said he is 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 business much more efficient using GameStop’s capital, governance and operating experience.
What makes Cohen’s ambition notable to cryptocurrency investors is that it could mark the end of GameStop’s foray into bitcoin.
Last week, blockchain data showed that GameStop had transferred that entire stash of bitcoins (worth just $368 million today) to Coinbase Prime, sparking immediate speculation that the company was preparing to sell those holdings.
When asked if GameStop would liquidate its bitcoin to fund the acquisition, Cohen declined to confirm. “I’m not prepared to say,” he told CNBC, adding that the new strategy is “much more compelling than bitcoin.”
