CNBC host Jim Cramer said Thursday that GameStop Corporation (NYSE: GME) could justify its share price by turning into a cryptocurrency play.
What Happened: The “Mad Money” host made references to other companies like Paypal Holdings Inc (NASDAQ: PYPL) and Nvidia Corporation (NASDAQ: NVDA), both of which are linked in some way or the other to cryptocurrency at the present.
“If GameStop were to turn itself into a 5,000-store introduction to crypto, make it so that they sell $1 billion worth of stock … and buy crypto with it, and then make it so it’s an international gaming place where you win bitcoin, I think you can justify the stock price,” theorized Cramer.
“I have not been able to come up with anything else, but this works. And it doesn’t have to be bitcoin. We can make it crypto.”
Cramer said if GameStop turns itself into a “crypto information place” and has worldwide games with no latency it would add to the credibility of GameStop investor and Chewy Inc. (NYSE: CHWY) co-founder Ryan Cohen.
The former hedge fund manager also pointed to the upcoming resignation of GameStop CFO Jim Bell and said, “CFOs, they tend not to have bitcoin on their balance sheet. Perhaps Jim Bell, that’s what he didn’t want.”
Cramer called Cohen a “big thinker” and said “I have a feeling that this is the way to get this stock higher. I can’t come up with another way.”
Why It Matters: GameStop, AMC Entertainment Holdings Inc (NYSE: AMC), BlackBerry Ltd (NYSE: BB), and Nokia Oyj (NYSE: NOK) shares were buoyed in a short squeeze carried out by Reddit forum r/WallStreetBets.
A notable poster on the forum — “Deep F—ing Value” — who has been credited by forum members for pointing out the short squeeze opportunity told U.S. lawmakers that he likes GameStop stock.
“As far as I can tell, the market remains oblivious to GameStop’s unique opportunity within the gaming industry,” said the poster whose real name is Keith Partick Gill.
On Wednesday, Cramer called the over 103% rise in the shares of GameStop “a mockery,” and questioned, “Where is the government?”
Alma Angotti, a former Securities and Exchange Commission enforcement attorney said that heightened interest from regulatory bodies could be expected.
“I think both Congress and the SEC will be studying that balance between orderly markets and letting people invest what they want to invest for whatever reasons they want to invest even if it doesn’t make sense to us,” CNBC reported.
Price Action: GameStop shares closed nearly 18.6% higher at $108.73 on Thursday and fell 2.51% to $106 in the after-hours session.
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