Two hot stock-market trends have collided. GameStop, the original meme stock, is now a sort of SPAC, Reuters reports in this analysis article.
The video-game retailer has used this year’s 11-fold increase in its market capitalization to transform itself. Firstly, with new management, including CEO Matt Furlong, an Amazon.com alum. And secondly, with cash from issuing new shares: $552 million in April, and $1.1 billion more this month.
GameStop is now a pile of money with a chain of stores attached. Cash now makes up half the company’s enlarged balance sheet, compared with 13% at the median U.S.-listed company, according to Refinitiv data. By investing that in technology, new products and even blockchain efforts, Furlong hopes to turn GameStop into a totally different business.
If the idea of a listed company full of cash looking to become something else sounds familiar, it’s because it’s also the idea behind SPACs. Read more.