GameSquare is making big moves in cryptocurrency.
The media, entertainment and technology company backed by Jerry Jones and Fort Worth investor John Goff will spend $100 million on Ethereum in a new cryptocurrency investment strategy.
Frisco-based GameSquare Holdings is selling 8,421,054 shares of common stock for $0.95 per share with an expected profit of $8 million.
“Today’s announcement reflects the confidence of a proven group of high-quality investors and leaders in decentralized finance,” GameSquare CEO Justin Kenna said in a statement. “We’ve partnered with one of the world’s top crypto investment firms to generate real, on-chain yield while deepening our expertise in decentralized finance, pursuing new revenue streams, and strengthening our balance sheet.”
Ethereum is the world’s second-largest cryptocurrency with a total market cap of about $321 billion, according to Coinbase. That’s just a fraction of Bitcoin’s $2.2 trillion value, but one Ether is still trading for more than $2,600.
GameSquare is partnering with Dialectic, “a global leader in crypto-native capital management,” according to a company press release.
The firm’s Ethereum-focused strategy will use Dialectic’s platform Medici, which “applies machine learning models, automated optimization, and multi-layered risk controls to generate best-in-class risk-adjusted returns,” the press release said.
GameSquare believes the strategy will generate a targeted yield of 8% to 14%. Ethereum’s price is up about 7.2% this year.
“This new treasury management strategy enhances our financial flexibility and allows us to support a defined capital allocation plan that is focused on pursuing additional ETH asset purchases, funding potential share repurchases and reinvesting in our growth initiatives,” Kenna said.
In the future, GameSquare’s treasury strategy may use other investment vehicles like stablecoins and nonfungible tokens to diversify its returns.
GameSquare connects brands and game publishers with hard-to-reach audiences. It works closely with FaZe Clan, a well-known esports and entertainment company. The firm has one of the largest gaming media networks in North America, according to its website.
Jones became involved in GameSquare after investing in Complexity Gaming in 2017. He and the other investors in the company, including Goff, sold Complexity to GameSquare in 2021. Jones received an ownership stake as part of the deal.
Jones and the Goff family are the largest investors in the company.
