With GameStop's stock more than doubling in price over the last two days, CNBC’s Jim Cramer is proposing the brick-and-mortar company change its business model to be more inclusive of cryptocurrencies.
Speaking on CNBC’s Squawk Box today, the Mad Money host suggested that he had a plan to "justify the stock price" of GameStop. At the time of publication, the price of GME is $131.17 — an increase of more than 175% in the last 24 hours after weeks of sideways action. In addition to following the example of Tesla, which purchased $1.5 billion Bitcoin (BTC), Cramer proposed GameStop mimic Square and PayPal by becoming "a dealer in crypto."
"If GameStop were to turn itself into a 5,000-store introduction to crypto [...] make it so that’s an international gaming place where you win Bitcoin, I think you can justify the stock price," said Cramer.
The Mad Money host suggested that all GameStop locations — 3,447 as of January — could convert to "crypto-information palaces" in which the company would allow players to buy and sell cryptocurrencies in addition to offering them as gaming rewards. He added that GameStop’s largest investor, Chewy CEO Ryan Cohen, could convince the board of directors to purchase $1 billion to $2 billion worth of BTC.
It is somewhat unusual for investors or advisors to propose that a company change its business model to justify a stock price. However, GameStop is no longer a typical brick-and-mortar company.
Retail investors from Reddit drove the GME stock price up last month in an attempt to short squeeze hedge fund bets. The result of these actions kept the gaming store at the front of financial news for a number of weeks. On Feb. 18, the CEO of trading platform Robinhood, along with representatives from Reddit and the hedge fund Citadel, spoke at a House Financial Services Committee concerning the GameStop trades.