GME <3 Strategy

Who knew poor lighting, all-black matching outfits, and two awkward smiles would be enough to move markets?

Ryan Cohen, CEO of Gamestop, broke the retail-trader internet by posting a photo with famed bitcoin bull and Strategy founder Michael Saylor over the weekend. Shares of GameStop 9.66% popped today, while Strategy rose 2.16%.

If Strategy doesn’t ring a bell, that’s because you probably know it as MicroStrategy—the largest corporate holder of bitcoin, with a position worth roughly $50 billion. Earlier this month, the company went through a rebrand—updating its logo to include the bitcoin symbol and changing its name to just “Strategy.” Maybe the word “micro” sounded too beta for bitcoin bros?

Meme madness takes crypto

The two companies—originally a video game store shop chain and an enterprise software firm—aren’t exactly trading on balance sheet fundamentals.

Both have tapped into retail investors in different ways: GameStop through its infamous r/WallStreetBets run back in 2021 led by Roaring Kitty (if you don’t understand that sentence, count yourself lucky), and Strategy by becoming a bitcoin play that essentially allowed equities investors to gain exposure to crypto in the stock market.

Investors are hoping the posted photo means that GameStop, which appears to have given up rescuing its business the old-fashioned way, might be trying to hop onto the bitcoin bandwagon through some kind of collab with Saylor. The gaming firm tried to roll out crypto wallets before shutting down the service due to “regulatory scrutiny” in 2023.

Strategy, meanwhile, just restarted its rabid bitcoin guzzling after a brief pause on the heels of macro uncertainty. Just today, the firm revealed it bought another $724 million worth of bitcoin between Feb. 3 and yesterday.

The bottom line: Investing based on a social media post is a move right up meme alley, which means it's more like gambling than investing. Doesn’t sound like a great Strategy—micro or macro—to us.—LB