Is GameStop gearing up for a Bitcoin shift like MicroStrategy?

GameStop Corp (NYSE: GME) chief executive Ryan Cohen shared a picture with MicroStrategy Inc’s (NASDAQ: MSTR) chairman Michael Saylor on Sunday.

Shares of both companies are inching up today.

Investors are responding positively to the news as they’re reading it as a hint that GameStop may be considering changing its strategy to focus on the world’s largest cryptocurrency – Bitcoin.

A similar shift from MicroStrategy in 2020 has proven rather lucrative for the business intelligence firm in recent years. Its shares have delivered nearly a 25-fold return over the past four years.

GameStop stock, on the other hand, has lost close to 70% during the same period.    

Does GME have experience with crypto?

If GameStop indeed shifts its focus to Bitcoin, it won’t be the first time for it to dip its toe in crypto.

The gaming merchandise retailer had previously introduced crypto wallets – a service that was later shut down due to regulatory uncertainty.

Cohen’s appointment to GameStop in 2021 was well-received as investors thought his experience with e-commerce could help modernize the conventional retailer and help it remain relevant amidst the changing habits of gamers.

However, GME shares continue to struggle to date apart from short-lived rallies known more broadly as the meme stock phenomenon.

MSTR has outperformed Bitcoin since 2020

Much like GameStop stock, MicroStrategy Inc, or the bitcoin proxy that recently changed its name to “Strategy”, is also popular among retail investors.

Since 2020, the Nasdaq listed firm has accumulated about $47 billion worth of BTC. So, a significant portion of its value is now tied to its Bitcoin holdings.

In fact, the company’s BTC strategy has enabled its stock to rally from $14 only at the start of the pandemic to $334 at writing – a 25x return that outdoes Bitcoin at about 10x return during the same period.

Still, MSTR shares are much more affordable than Bitcoin at $100,000 at writing.

Strategy loaded up on BTC last week

Also on Monday, MicroStrategy said it sold more than half-a-million of its common shares last week to generate about $179 million in net proceeds.

Additionally, the company resorted to a public offering of its preferred stock to raise another $563 million after deductions.

MSTR used all these funds to load up on 7,533 bitcoins between February 3^rd and February 9^th at an average BTC price of $97,255.

Note that Strategy’s exposure to the world’s largest crypto has made it equally popular among analysts as well.

In a recent report, investment firm KBW told client that MicroStrategy stock could climb further to $560 that translates to about a 75% upside from current levels.

That said, MSTR shares do not currently pay a dividend. So, they remain rather unattractive for investors in search of an additional means of passive income.