On Sunday, GameStop Corp’s chief executive Ryan Cohen posted a photo with MicroStrategy Inc. (NASDAQ: MSTR), chairman Michael Saylor.
Today, shares of both companies have been steadily rising.
The news is viewed positively by investors who interpret it to mean that GameStop might be changing its focus to include the largest cryptocurrency in the world – Bitcoin.
In recent years, a similar move by MicroStrategy to 2020 proved profitable for the company. Over the last four years, its shares have nearly 25-folded in value.
GameStop’s stock has, however, lost almost 70% of its value during this time period.
GME has experience in cryptography?
It won’t mark the first time that GameStop has dabbled in cryptocurrency.
The retailer of gaming products had introduced cryptocurrency wallets in the past. However, this service was shut down later due to uncertainty over regulatory issues.
Cohen’s appointment as GameStop CEO in 2021 received a positive response from investors who believed that his experience in e-commerce would help to modernize and maintain the retailer’s relevance despite the ever-changing habits of players.
GME’s shares have struggled to this date, apart from the short-lived rallies that are known as meme stocks.
MSTR outperforms Bitcoin since 2021
Retail investors also like MicroStrategy Inc. or Bitcoin proxy, which recently changed their name to “Strategy”.
The Nasdaq-listed firm has amassed BTC worth about $47 billion since 2020. A significant part of the firm’s value now is tied to Bitcoin.
The company has used BTC to boost its stock from only $14 at the beginning of the pandemic, to $334 as I write this – 25x more than Bitcoin’s 10x increase during that same time period.
MSTR shares, at $100 each, are still much cheaper than Bitcoin.
Last week, BTC was awash with strategy.
MicroStrategy also announced on Monday that it had sold over half a million of its shares in the last week, generating about $179 millions net.
The company also used a public offer of preferred shares to raise an additional $563 million, after deductions.
MSTR spent all of these funds on a total of 7,533 Bitcoins from February 3 to February 9 , at an average BTC value $97.255.
Strategy is also popular with analysts due to its exposure to crypto, the largest cryptocurrency in the world.
In a report published recently, investment company KBW informed a client that MicroStrategy’s stock price could rise to $560. This would represent a 75 percent increase from the current level.
MSTR does not pay dividends at this time. They are therefore not attractive to investors looking for a passive source of income.
This article Is GameStop preparing for a Bitcoin-based shift similar to MicroStrategy’s? This post may change as new information becomes available
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