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Date: 2025-02-25 17:03:46
The CEO of Strive Asset Management, Matt Cole, has called on GameStop to adopt bitcoin as a reserve asset. Strive Asset Management is a company that was co-founded by Vivek Ramaswamy.
On February 24, Cole sent a letter to Ryan Cohen, the Chairman and CEO of GameStop (GME). According to Cole, GameStop could position itself as a leader in the market by utilizing its nearly $5 billion cash reserve.
"We believe that GameStop has an unparalleled opportunity to revolutionize its financial outlook by becoming the foremost bitcoin treasury company in the gaming industry."
The letter revealed that GameStop shares are held by Strive's clients through the firm's exchange-traded funds (ETFs), giving Strive a "fiduciary responsibility and vested interest" in GameStop's success. Cole stated that his firm holds GME stock in three different ETFs, but he did not disclose the amount.
This letter comes after rumors surfaced earlier this month about GameStop considering alternative investments, including bitcoin and cryptocurrencies.
In the past two years, GameStop has decreased its operating losses and managed to make up for these deficits through interest income from cash holdings generated from equity offerings, according to the letter. These efforts have fortified GME's balance sheet and prepared the company for "dynamic strategic moves," the letter adds.
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Cole contends that bitcoin will become the new "hurdle rate" for capital deployment. The letter also argues that cash has a negative real return, while bitcoin is seen as a hedge against inflation due to its ability to outpace monetary debasement. Strive's CEO suggests that GameStop should prioritize bitcoin and avoid other cryptocurrencies, while also leveraging capital markets to issue at-the-market (ATM) offerings and convertible debt securities.
This suggestion is similar to what several other companies, including MicroStrategy, Semler Scientific, and MARA Holdings, are already implementing. Most of the larger-cap stocks that have purchased bitcoin in the open market have not only seen their stock price increase but have also opened up new avenues for capital raises.
The letter concludes with Cole commending GameStop for closing unprofitable stores and publicly rejecting diversity, equity, and inclusion (DEI) programs.
Cole said, "We applaud the steps your company has already taken to close many unprofitable stores and publicly reject DEI."
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