GameStop Urged to Convert Its $5B Cash Into Bitcoin by Strive's CEO Matt Cole

Matt Cole, CEO of Strive Asset Management—an investment firm co-founded by Vivek Ramaswamy—has urged GameStop to adopt bitcoin as a reserve asset.

Cole sent a letter to Ryan Cohen, Chairman and CEO of GameStop (GME), on Feb. 24. According to Cole, GameStop has a unique opportunity to redefine itself as a market leader with its nearly $5 billion cash reserve.

"We believe GameStop has an incredible opportunity to transform its financial future by becoming the premier bitcoin treasury company in the gaming sector."

According to the letter, Strive's clients hold shares of GameStop through the asset management's exchange-traded funds (ETFs), giving the firm "a fiduciary responsibility and vested interest" in GameStop's success. Cole said his firm holds GME stock in three different ETFs without disclosing the amount.

The letter comes after reports surfaced earlier this month about GameStop considering investing in alternative investments, including bitcoin and cryptocurrencies.

In the last two years, GameStop has reduced its operating losses and managed to offset these deficits through interest income from cash holdings generated from equity offerings, the letter said. These initiatives have stabilized GME's balance sheet and positioned the company for "dynamic strategic moves," the letter adds.

Cole argues that bitcoin will be the new "hurdle rate" for capital deployment. The letter also argues that cash is a negative real return; bitcoin is deemed an inflation hedge in terms of outpacing monetary debasement. Strive's CEO suggests GameStop should focus on bitcoin and avoid other cryptocurrencies while leveraging capital markets to issue at-the-market (ATM) offerings and convertible debt securities.

The letter's suggestion mirrors what several other companies, including MicroStrategy, Semler Scientific and MARA Holdings, are already deploying. Most of the larger-cap stocks that have bought bitcoin in the open market have seen not only their stock price rally but also opened up new avenues for capital raises.

The letter ends with Cole applauding GameStop for closing unprofitable stores and publicly rejecting diversity, equity, and inclusion (DEI) programs.

Cole says, "We applaud the leadership your firm has already taken to close many unprofitable stores and publicly reject DEI."