Activist investors urge struggling companies to adopt Bitcoin
Activist investors are currently focusing on a new strategy: Encouraging struggling companies to store Bitcoin on their balance sheets in order to potentially increase revenue and revolutionize their operations by investing in the longevity of the cryptocurrency.
Last week, Matt Cole, the CEO of Strive Asset Management, publicly announced his intent to advise GameStop, a well-known meme stock that has faced challenges in finding sustainable income beyond game cartridges, to invest in Bitcoin.
Cole anticipates that within the next ten years, every major publicly traded company will follow suit and include Bitcoin in their portfolios. His goal is to guide numerous companies in acquiring Bitcoin throughout the year to enhance their financial positions and adapt to the future.
“Zombie companies that lack viability can benefit from holding Bitcoin on their balance sheets to prepare for the future. I advise companies to invest in Bitcoin unless they have more profitable alternatives for that asset,” Cole stated. “Traditionally, companies hold cash in short-term treasuries or allocate it to stock buybacks or dividends. However, Bitcoin has demonstrated increased real purchasing power in recent years.”
Established by Vivek Ramaswamy in 2022, Strive was created to counter ESG (environmental, social, governance) priorities. With ESG values declining in many corporations, Cole believes that advocating for companies to invest in Bitcoin presents a significant opportunity for his firm.
In a recent correspondence to GameStop, Cole mentioned that the company, which currently holds $5 billion in cash reserves, has the potential to transform its financial future by becoming a leading Bitcoin treasury organization within the gaming industry. While Cole did not disclose his exact ownership stake, he declared that he holds a substantial interest through multiple exchange-traded funds.
Multiple public companies, including Tesla and Reddit, have begun accumulating Bitcoin to diversify their assets. Noteworthy among these endeavors is MicroStrategy, helmed by Michael Saylor, which saw its stock skyrocket by over 2,000% after amassing Bitcoin, surpassing its previous stagnant share prices.
In an effort to emphasize its Bitcoin holdings, MicroStrategy rebranded itself as Strategy and incorporated a Bitcoin symbol into its logo. GameStop’s CEO, Ryan Cohen, recently posted a photo with Michael Saylor, hinting at a potential alignment of GameStop’s strategy with that of Strategy.
Beyond corporate investments, various US states and countries like Bhutan and El Salvador are actively engaging with Bitcoin. Notably, President Trump expressed his plans to establish a US crypto reserve featuring Bitcoin, Solana, Ethereum, and other cryptocurrencies.
While some may question why investors would opt for companies like Strategy instead of directly holding Bitcoin, institutions constrained by SEC regulations find exposure to Bitcoin through stocks like Strategy appealing. Cole is urging companies to act promptly, as he believes now is the time to excel in the market.
However, the widespread adoption of this approach remains uncertain. Dan Ives, Global Head of Technology Research at WedBush Securities, predicts that less than 5% of companies will implement this strategy in the next 12-18 months, but every public company will need to consider this path due to the groundbreaking actions taken by Saylor and MicroStrategy.
