Jim Cramer Explains How GameStop Could Justify its Stock Price: Become a ‘Gaming Place Where You Can Win Bitcoin’

CNBC host Jim Cramer suggested that GameStop become a “5,000-store introduction to bitcoin” in an effort to justify its valuation during surges in the price of the company’s stock.

“One of the things that I think we saw Square do — initially it seemed ridiculous, but it was OK, PayPal, same thing — it should become a dealer in crypto,” Cramer said in a Thursday segment on CNBC.

He noted that Nvidia, which manufactures graphics cards, announced this month that it would begin creating cards specifically for cryptocurrency miners, who rely on the cards to create digital currency. Gaming consumers have suffered in recent years from a shortage of high-end graphics cards, as well as the computers that use them, as a result of those miners snapping them off the market.

“It could be an important for a place like GameStop,” Cramer said. “If GameStop were to turn itself into a 5,000 store introduction to crypto, make it so the they … sell a billion dollars 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. I have not been able to come up with anything else, but this works.”

The price of shares in GameStop surged by more than 400 percent on Thursday, backed by Reddit users enthusiastic about pumping up the value of the company’s stock, for the second time in a month. The price rose from $43 on Tuesday to about $180 on Thursday, before sinking back to around $100 on Friday afternoon.

“Turn it into a crypto information palace, and you have worldwide games, no latency, you play it,” Cramer added.

He also speculated that former GameStop CFO Jim Bell, who departed the company this week, might have left as a result of activist investor Ryan Cohen pushing for an investment related to cryptocurrency.

“You can have 5,000 stores introducing us to Ethereum, all the different Dogecoin — you actually set up worldwide contests, prizes done in bitcoin. Is this exactly what Ryan Cohen is doing? We don’t know, but we know that CFOs don’t like bitcoin. … I’m mixing Edgar Allen Poe, OK, with a little [Herman] Melville.”

Watch above via CNBC.