Struggling Companies Turn to Bitcoin—Can It Save Their Stocks?

• Struggling companies like Goodfood Market Corp are investing in Bitcoin, hoping to attract investors and boost stock liquidity instead of focusing on core operations.
• While MicroStrategy’s Bitcoin strategy has fueled massive stock gains, regulatory risks and tax challenges could complicate similar corporate moves.

Companies with shrinking revenues and stagnant stock prices are making a bold move—buying Bitcoin. Instead of focusing on core business reinvestments, firms such as Goodfood Market Corp are banking on Bitcoin to attract investors and boost liquidity. Some see it as a savvy move, while others view it as financial desperation.

Dozens of public companies have been following in the footsteps of Michael Saylor’s Strategy by using corporate cash, and in some cases borrowed money, to buy Bitcoin https://t.co/86mRyw3SnR

— Bloomberg (@business) February 19, 2025

Goodfood CEO Jonathan Ferrari, once at the helm of a promising meal-delivery startup, witnessed his company’s stock collapse by 98% from its pandemic highs. In an attempt to turn things around, Ferrari turned to Bitcoin. 

“We have a nice core business, but it’s too small to be relevant to the capital markets. I think as we start investing more into our Bitcoin treasury strategy, we’ll be able to create more liquidity in our stock and attract investors,” Bloomberg quoted Ferrari.

Other companies are following a similar playbook. Social media platforms, video game retailers, and even coal mining firms are pouring corporate cash into Bitcoin, hoping to mimic the success of MicroStrategy, the company that pioneered this strategy. Some firms, such as Semler Scientific, are even borrowing funds to invest in the digital asset.

MicroStrategy’s Success Sparks a Rush

Few companies have embraced Bitcoin as aggressively as MicroStrategy, now rebranded as Strategy. As we earlier reported, the firm currently holds around 478,740 bitcoins worth approximately $46.6 billion. That approach has rewarded shareholders handsomely, with MicroStrategy’s stock soaring 352% over the past year.

GameStop, the struggling video game retailer, is reportedly considering a similar approach. CEO Ryan Cohen’s social media post alongside MicroStrategy’s Michael Saylor fueled speculation that GameStop might invest in Bitcoin. That possibility alone led to a 7% jump in GameStop’s stock.

Not everyone sees this trend as a sound financial strategy. Bitcoin critic Peter Schiff dismissed GameStop’s rumored Bitcoin pivot, saying:

GameStop, a company with no viable business plan, has thrown another Hail Mary by announcing that it might use its cash to buy Bitcoin. The irony is that Bitcoin is even more overpriced than GME. No matter; speculators are buying the stock anyway, hoping it becomes another MSTR.

The Hidden Risks of a Bitcoin Bet

For all its potential rewards, the Bitcoin strategy carries serious risks. Market volatility remains a constant threat, and regulatory challenges loom large. MicroStrategy, for instance, is dealing with a potential billion-dollar tax headache over its Bitcoin gains. The company’s $47 billion Bitcoin holdings include $18 billion in unrealized gains, putting it in the crosshairs of the US corporate alternative minimum tax (CAMT).

New accounting standards could add even more complexity. The Financial Accounting Standards Board (FASB) now requires companies to report the fair value of cryptocurrency holdings on balance sheets. That rule alone could increase MicroStrategy’s retained earnings by $12.8 billion and its deferred tax liabilities by up to $4 billion.

Meanwhile, regulators are tightening oversight on crypto transactions. The IRS plans to start tracking cryptocurrency transactions on centralized exchanges in 2025, signaling a broader crackdown. Companies betting on Bitcoin will likely face intensified scrutiny, potentially dampening enthusiasm for this strategy.

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