Just weeks after billionaire GameStop CEO Ryan Cohen made headlines for his controversial $35 billion payday pursuit, the company’s chairman says he plans to buy a publicly traded company to help boost GameStop’s $11 billion market cap to $100 billion-plus. In a new interview with The Wall Street Journal (WSJ), 40-year-old Cohen says the potential acquisition — likely in the consumer or retail industry — will be a big one. “It’s ultimately either going to be genius or totally, totally foolish,” he told WSJ.
Cohen’s confident comments caught the attention of infamous American investor Michael Burry, best known for his bets against the U.S. housing market and Christian Bale’s portrayal in the 2015 dramedy The Big Short. Burry also has a stake in GameStop and, in a recent Substack post, urged Cohen to acquire another company to help grow the video game retailer.
GameStop reportedly has about $9 billion in liquid assets it can use to make a deal. “There are a lot of diamonds in the rough … that have sleepy management teams,” Cohen said of potential investments in existing retailers. “I didn’t fix GameStop to stop there.” At the time of writing, GameStop (GME) is up 4.32 percent.
GameStop CEO’s potential payday comes with a catch
No one stands to benefit from Cohen’s latest plans quite like Cohen himself. At the start of the year, GameStop announced it would close more than 400 of its brick-and-mortar locations, affecting about one-quarter of the chain’s U.S. stores. These closures came as part of a “comprehensive store portfolio optimization” plan that, if executed, would earn Cohen around $35 billion in stock payouts.
GameStop broke down Cohen’s “performance-based stock option award” in a January 7 release, clarifying that the CEO must increase the company’s market cap from $11 billion to a whopping $100 billion before cashing in. “The first tranche vests only if GameStop achieves a market capitalization of $20 billion. Each subsequent tranche requires an additional $10 billion increase in market capitalization, up to $100 billion.”
Cohen’s payouts are part of a performance-based “tranche vesting” strategy that splits awarded equity into several, more modest installments, contingent on the CEO’s ability to meet market milestones. “This structure ensures that Mr. Cohen’s incentives are directly aligned with creating long-term value for GameStop’s stockholders,” GameStop said in its January 7 filing.
About GameStop CEO Ryan Cohen
40-year-old Canadian entrepreneur Ryan Cohen first got his start in the early 2010s as the founder of major pet supply retailer Chewy. Before joining GameStop (GME) in 2021, served as the online pet store’s CEO before selling to PetSmart in 2018.
Since joining GameStop five years ago, shares have fallen about 80 percent. Meanwhile, just last week, Cohen picked up another 500,000 shares for nearly $11 million. Cohen’s continued investments make him the company’s single-largest shareholder, with 9 percent of shares outstanding.
