There has been plenty of buzz around GameStop (NYSE:GME) over the past few years, though generally not revolving around its core business of selling video games. The meme stock has seen some rapid spikes, driven by Tweets, short squeezes, and a fair amount of market exuberance.
Maximize Your Portfolio with Data Driven Insights:
- Leverage the power of TipRanks' Smart Score, a data-driven tool to help you uncover top performing stocks and make informed investment decisions.
- Monitor your stock picks and compare them to top Wall Street Analysts' recommendations with Your Smart Portfolio
The company management has received praise for taking advantage of the jumps to issue shares and raise capital. All told, the company now has some $4.6 billion in cash on hand, along with very little long-term debt (less than $10 million).
While the company’s video game business remains unprofitable, GME CEO Ryan Cohen has instituted an investment policy which gives him the flexibility to invest in a broad range of securities.
One top investor known by the pseudonym Geneva Investor is intrigued by the possibility GME might transition into a holding company, one that could even come to include Bitcoin.
“I think GME could benefit from investing in Bitcoin, potentially pivoting to become the first ‘Bitcoin Consumer Bank’ by leveraging its retail presence to offer Bitcoin-related services,” speculates the 5-star investor, who is among the top 2% of TipRanks’ stock pros.
While acknowledging that Cohen has yet to provide clear guidance on company plans for the massive haul of cash on its books, Geneva notes that the GameStop CEO recently posted a picture of himself and MicroStrategy CEO and Bitcoin evangelist Michael Saylor.
Geneva openly wonders if this means that Cohen is considering following the example of Saylor, who turned MicroStrategy Inc. into a major holder of Bitcoin. The investor identifies plenty of merit in following such an approach.
“By leveraging its strong existing retail footprint, GameStop could close the ‘physical’ gap of Bitcoin for consumers, accelerating its adoption,” notes Geneva. “GameStop could for example offer Bitcoin ATMs, Prepaid Cards to purchase Bitcoin, educational material and other Bitcoin related services to customers.”
Though the investor cautions that the Bitcoin idea is not enough to warrant purchasing GME shares at present, Geneva does argue that it makes the stock worth sticking with for those who are already invested.
“Since this is effectively a Meme Stock that does not trade on fundamentals, it may be worth holding to see whether a potential Bitcoin announcement may act as a catalyst for a new bull run,” adds Geneva, who rates GME a Hold. (To watch Geneva Investor’s track record, click here)
Wall Street, however, is paying scant attention to GME, which only has one Sell rating from the past three months. Wedbush analyst Michael Pachter is bearish on GME shares, and his $10 price target has a downside of over 60%. (See GME stock forecast)
To find good ideas for AI stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a tool that unites all of TipRanks’ equity insights.
Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
