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FRISCO, Texas - GameSquare Holdings, Inc. (NASDAQ:GAME), a $145 million market cap company that has seen its stock surge over 84% year-to-date, announced Monday that its Board of Directors has increased the company’s digital asset treasury management authorization from $100 million to $250 million. According to InvestingPro analysis, the company’s stock is currently fairly valued, though it operates with high price volatility.
The next-generation media company recently purchased $30 million of Ethereum, acquiring approximately 8,351.89 ETH at a weighted average price of about $3,592 per ETH. GameSquare now holds approximately 10,170.74 ETH valued at around $38 million as of Monday. This significant crypto investment comes as the company shows strong revenue growth of 77% in the last twelve months, though InvestingPro data indicates the company is quickly burning through cash with a concerning current ratio of 0.57.
As part of the expanded program, the company has launched a new NFT yield strategy with an initial $10 million allocation. This strategy will focus on Ethereum-native digital assets, including digital art and collectibles, and aims to generate stablecoin yields targeting a 6-10% return.
"We’re not just holding Ethereum, we’re putting it to work in a proprietary way with best-in-class partners," said Justin Kenna, CEO of GameSquare, according to the company’s press release.
The company has implemented a dedicated digital asset investment committee reporting to the Board to oversee these allocations. GameSquare has formed strategic partnerships with industry leaders including Ryan Zurrer of Dialectic and Rhydon Lee of Goff Capital to manage its treasury program.
GameSquare’s yield generation strategy is built on Dialectic’s proprietary platform Medici, which applies machine learning models and risk controls to generate returns. The company states that targeted onchain yields of 8-14% exceed current ETH staking benchmarks of 3-4%.
The company plans to allocate capital generated from this strategy to support additional ETH asset purchases or reinvest in growth initiatives.
GameSquare operates in the media, entertainment, and technology sectors, focusing on connecting brands and publishers with younger audiences. The company owns FaZe Clan, which it describes as "one of the most iconic gaming organizations." For deeper insights into GameSquare’s financial health and growth prospects, including 13 additional ProTips and comprehensive valuation metrics, investors can access the full company analysis through InvestingPro’s detailed research report.
In other recent news, GameSquare Holdings, Inc. announced the pricing of its public offering, aiming to raise approximately $70 million by selling 46,666,667 shares at $1.50 each. This move is part of GameSquare’s strategy to bolster its Ethereum holdings, with a potential total raise of $80.5 million if an overallotment option is fully exercised. The company has already raised $9.2 million, bringing the total gross proceeds from recent offerings to over $90 million. GameSquare plans to deploy these funds into Ethereum acquisition strategies in collaboration with Dialectic, a crypto-native capital management firm. Additionally, the company is preparing to review its $100 million Ethereum treasury strategy, which aims to generate on-chain yields of 8-14% through Dialectic AG’s Medici platform. This initiative could potentially result in over $10 million in annual profitability. Lucid Capital Markets is managing the public offering, and a conference call is scheduled to discuss the Ethereum strategy in detail. GameSquare’s recent activities indicate a strong focus on leveraging Ethereum for strategic growth and profitability.
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