GameStop's $100 Billion Gamble: CEO Ryan Cohen Bets Big on Transformative Acquisition
Half a decade after GameStop Corp. became the poster child of the Reddit-fueled retail trading revolution, its leadership is plotting a comeback that could dwarf even the volatility of 2021. CEO Ryan Cohen is setting his sights on a transformative acquisition of a publicly traded company, a move he admits could be seen as "genius or totally, totally foolish." The goal: to catapult the $11 billion video game retailer into a $100 billion-plus consumer giant.
In an interview with The Wall Street Journal, Cohen outlined his vision to extend GameStop far beyond its core—and increasingly challenged—business of physical video games and collectibles. The plan comes with a staggering personal incentive: a compensation package approved by the board this month that could award Cohen over $35 billion in stock options if he delivers a $100 billion market capitalization and $10 billion in Cumulative Performance EBITDA.
The context makes the ambition clear. While Cohen has grown GameStop's market cap from $1.3 billion in 2021 to about $9.3 billion today, the leap to $100 billion would require a seismic shift. The company's recent history is marked by strategic stumbles, including a brief, costly foray into Bitcoin and a pivot to trading cards that disappointed investors.
Expert Analysis: A Bridge Too Far?
Michael Pachter, managing director of equity research at Wedbush Securities, is profoundly skeptical. "I might give you a slightly better than 0.001% chance," Pachter told Fortune. "But I'd take the underside of that bet. It's not going to happen." He argues Cohen has yet to articulate a unique competitive advantage beyond the company's cash reserves, which stood at $8.83 billion last October. "He's in a business where the physical model is threatened by digital downloads, and there's little he can do to change that trajectory," Pachter added.
Cohen's track record includes a major success—founding Chewy, which was sold for $3.35 billion and later went public. Yet, replicating that feat at GameStop is a different challenge. "It's easy to say, 'I'll be the next Warren Buffett,'" Pachter noted. "But is Ryan Cohen a 'twice-catching-lightning-in-a-bottle' guy? I don't know."
Not all influential voices are pessimistic. Michael Burry of Scion Asset Management, famed for predicting the 2008 housing crash, recently revealed a long-term investment in GameStop, expressing faith in Cohen's strategy and governance. "I believe in Ryan," Burry wrote. "I like the setup... I am willing to hold long-term." His endorsement provided a recent, if modest, boost to the stock.
The target of the potential acquisition remains undisclosed, though Cohen suggested it would be in the consumer or retail sector. The move underscores a desperate need to modernize as physical game sales decline—the very trend that fueled the short squeeze drama of 2021.
Voices from the Street:
"This isn't a strategy; it's a lottery ticket with a $35 billion jackpot for Cohen. Shareholders are being asked to fund a fantasy while the core business erodes. It's corporate governance gone wild." — Marcus Thorne, portfolio manager at Veritas Capital. (Sharp, emotional critic)
"The ambition is breathtaking, and Cohen has earned the right to be heard. Chewy was a moonshot that landed. While the odds are long, dismissing him outright ignores his proven ability to build value." — Dr. Anya Sharma, professor of finance at Kellogg School of Management.
"From meme stock to potential acquirer of scale—this is the narrative twist nobody saw coming. The market will treat this as a high-beta speculation play, pure and simple." — David Chen, independent market analyst.
"Burry's involvement is the most interesting data point here. He's a contrarian by nature, not a meme-stock follower. His bet suggests there might be a method to Cohen's madness that the market is missing." — Rebecca Lloyd, editor at The Capital Observer.
GameStop did not respond to a request for comment from Fortune. As the company charts this audacious course, it seeks to write a new chapter far removed from its origins as a video game haven and its subsequent role as a market phenomenon.