GameStop is a SPAC now

GameStop stock graph is seen in front of the company's logo in this illustration taken February 2, 2021.
GameStop stock graph is seen in front of the company's logo in this illustration taken February 2, 2021. REUTERS/Dado Ruvic/Illustration

LONDON, June 22 (Reuters Breakingviews) - Two hot stock-market trends have collided. GameStop (GME.N), the original meme stock read more , is now a sort of SPAC.

The video-game retailer has used this year’s 11-fold increase in its market capitalization to transform itself. Firstly, with new management, including Chief Executive Matt Furlong, an Amazon.com (AMZN.O) alum. And secondly, with cash from issuing new shares: $552 million in April, and $1.1 billion more this month read more .

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 special-purpose acquisition companies. Happily, GameStop comes without the fees and warrants that dilute investors in SPACs. Unhappily, it comes with a $14 billion market capitalization, which might make it the priciest cash shell going. (By John Foley)

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