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GameStop is considering investing in bitcoin and other cryptocurrencies, sources say

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A general view of the GameStop logo on one of its stores in the city center of Cologne, Germany.

Ying Tang | Nurphoto | Getty Images

Video game retailer turned meme stock GameStop is considering investing in bitcoin and other cryptocurrencies, according to sources familiar with the matter.

GameStop is exploring investments in alternative asset classes, including crypto and in particular bitcoin, three sources said. Shares of GameStop soared as much as 20% in extended trading following the news.

The retailer could decide not to follow through with the investments. The company is still in the process of figuring out if this made sense for GameStop’s business, according to one source.

Last weekend, CEO Ryan Cohen posted a photo on X with Michael Saylor, co-founder and chairman of MicroStrategy, the largest corporate holder of bitcoin. However, Saylor isn’t involved in GameStop’s discussion about crypto investments at this time, two of the sources said.

In 2022, GameStop launched crypto wallets that let users manage their crypto and nonfungible tokens. However, the firm shut the service down in 2023, citing “regulatory uncertainty.”

Cohen, co-founder of Chewy, bought shares in GameStop in 2020 and joined the board in 2021 as GameStop became one of the key meme stocks in the trading mania. His e-commerce experience fueled hopes that he could help modernize the brick-and-mortar retailer, but the company still is still struggling to adapt to changing spending habits by gamers.

Under Cohen’s leadership, GameStop has focused on cutting costs and streamlining operations to ensure the business is profitable even though it isn’t growing. As of Nov. 2, the company had amassed a $4.6 billion cash pile and has been using those funds for investments, according to a December securities filing.

Companies considering adding bitcoin to their balance sheet would be following in the footsteps of MicroStrategy. That company, recently rebranded to Strategy, has bought billions of dollars worth of bitcoin in recent years, effectively transforming from a software stock to a bitcoin holding vehicle.

The decision has helped fuel a rapid, if volatile, rise for Strategy’s stock.

In Dec. 2023, GameStop’s board approved a new “investment policy.” It allows Cohen, plus two independent board members and other necessary staff, to manage GameStop’s portfolio of securities investments. Those investments have to conform to the policy’s guidelines, or be approved by the committee by unanimous vote or the full board by majority vote.

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TMUS, GOOGL, TSLA, INTC and more

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T. Rowe Price likes stock picking now

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One of the largest active ETF managers on leveraging fund tactics in new ways

It appears T. Rowe Price is benefitting from the record growth in actively managed exchange traded funds.

Tim Coyne, the firm’s head of ETFs, reports the firm is seeing significant growth in the area — listing the T. Rowe Price Capital Appreciation Equity ETF (TCAF) and T. Rowe Price U.S. Equity Research ETF (TSPA) as two established strategies that can satisfy investor demand.

“I think having that professionally managed portfolio is really beneficial to clients,” Coyne told CNBC’s “ETF Edge” this week. “We’re seeing just… greater volatility [and] uncertainty across both the equity and fixed income markets.

According to Coyne, the T. Rowe Price Capital Appreciation Equity ETF suits investors who are looking for long-term growth.

“The objective of the fund is to outperform the S&P 500 with lower volatility and greater tax efficiency,” he said. “It’s also a more concentrated portfolio, typically holding around a hundred names.”

As of April 24, the fund’s top holdings include Microsoft, Amazon, and Apple according to the T. Rowe Price website. But it’s not all Big Tech. The ETF also features smaller positions in companies like Becton Dickinson and Roper Technologies.

The T. Rowe Price Capital Appreciation Equity ETF is down about 5% so far this year while the S&P 500 is off about 7% However, the ETF is up close to 8% over the past year — roughly identical to the S&P 500’s performance.

Coyne notes the T. Rowe Price U.S. Equity Research ETF follows a similar strategy, but with a heavier weighting in top tech stocks.

“This is more of a large-cap growth product [T Rowe Price U.S. Equity Research ETF],” he said. “There are components of characteristics of both passive and active here. This fund is actually managed by our North American directors of research. So again, strong fundamental research is going into the stock selection.”

Both the T. Rowe Price U.S. Equity Research ETF and S&P 500 are down around 7% since the beginning of the year. Meanwhile, the fund is up almost 9% over the past year. That’s less than one percent better than the S&P 500’s performance.

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T. Rowe Price U.S. Equity Research ETF vs. S&P 500

‘Some form of bear market’

Strategas Securities’ Todd Sohn thinks investment demand for active managers will continue to be strong.

“This is the type of the environment where it [active management] can actually shine,” the firm’s senior ETF and technical strategist said. “We are in some form of bear market. This is where the active manager really can come into hand and offer their solution they are doing right.”

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