Senior – Earlybirds Invest

GameStop Planned Bitcoin Investment

The planned investment in Bitcoin follows a recent trend of GameStop exploring cryptocurrency ventures. Reports surfaced about a month ago indicating that the company was considering investments in the digital currency space.

Speculation intensified on February 8 when GameStop CEO Ryan Cohen shared a social media post featuring a photo with Michael Saylor, the CEO of Strategy (MSTR), a company renowned for its substantial Bitcoin holdings, which exceed 447,000 BTC tokens.

Saylor’s strategy of heavily investing in Bitcoin has proven fruitful, with MicroStrategy’s stock appreciating over 84% in the past year, largely in tandem with rising Bitcoin prices. However, Wall Street analysts remain cautious about GameStop’s ability to replicate this success.

Skepticism From Wall Street Experts

“The company’s strategy, which has changed about six times in three years, is they’re going to buy cryptocurrency and be just like MicroStrategy,” noted Wedbush analyst Michael Pachter.

Pachter further expressed skepticism about the effectiveness of this approach, particularly given Strategy trades at roughly two times its Bitcoin holdings. Pachter added, “If GameStop were to buy all Bitcoin with their $4.6 billion in cash and trade at two times their Bitcoin holdings, the stock would drop five bucks.”

Additionally, GameStop reported its fourth-quarter earnings results after the market closed on Tuesday, revealing $1.28 billion in net sales for the quarter—a 28% decline compared to the same period last year.

For the full fiscal year, the company posted an adjusted EBITDA of $36.1 million, a decrease from $64.7 million reported the previous year.

Experts’ concerns may also be stemming from Bitcoin’s volatility, which saw a more than 25% retracement from its record high of $109,000 reached during the broader market rally in January.

This developed into a drop toward the $76,000 mark on March 11th, a level not seen since November 2024. However, the market’s leading crypto has recovered to around $87,477 at the time of writing, reflecting a 4.5% increase in the fourteen-day time frame.

Featured image from DALL-E, chart from TradingView.com

Crypto prime broker FalconX has seen the departure of several senior staff recently, according to three people with knowledge of the matter.

Among those resigning was Tommy Doyle, FalconX’s European head, according to the sources.

The global chief compliance officer, general counsel, and head of credit at FalconX have also resigned, the sources said, who spoke on condition of anonymity as the matter is private. Two traders also exited the business, the people added.

Two of the people said the total number of departures was a combination of resignations and firings, and numbered between 10 and 15 people.

“Our headcount approximately doubled last year and we continue to grow. We do not comment on personnel matters,” a FalconX spokesperson said in an emailed comments.

Doyle declined to comment.

Prime brokers are essential to financial markets. They provide trading, financing and custody services to large institutions.

Before this wave of exits, Brian Strugats, head of trading at FalconX, had recently left the business, as reported by CoinDesk. He had worked for the firm for more than three years and was based in New York.

FalconX describes itself as the largest, most reliable digital assets prime brokerage for the world’s leading institutions. The company employed 243 people as of February 2023 according to PitchBook data.

The crypto firm was founded in 2018 and was valued at $8 billion at the time of a mid-2022 funding round.

Read more: Binance, FalconX and the Curious Case of 1.35M Missing Solana Tokens