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GameStop was once the go-to destination for video games. Then it was the archetypal \u201cmeme stock\u201d in 2021, when a band of Reddit-reading retail investors thwarted hedge funds\u2019 shorts on the company stock, sending the company\u2019s stock skyrocketing. There was even a movie about it. But its eccentric, some would say visionary, is back with a plan that he thinks could rival the wild days of half a decade ago.<\/p>\n
Despite that selloff, the company\u2019s CEO Ryan Cohen said in an interview with The Wall Street Journal he\u2019s aiming to turn the $11 billion company into a $100 billion-plus business via an acquisition of a publicly traded company. The billionaire envisions the company extending beyond its standard video game and collectible sales.<\/p>\n
\u201cIt\u2019s ultimately either going to be genius or totally, totally foolish,\u201d Cohen told The Journal.<\/p>\n
In a world where physical video games are swiftly becoming antiquated, the move signals the company\u2019s desire to modernize. The fervor over the company in 2021, which sent the struggling video retailer\u2019s stock up 2,700%, was inspired in part by hedge funds and retail investors\u2019 understanding that the company was growing obsolete. Nevertheless, Cohen believes he can turn that image around and find a buyer willing to pay hundreds of billions for the business.<\/p>\n
GameStop did not immediately respond to Fortune<\/em>\u2019s request for comment.<\/p>\n It\u2019s unclear exactly what company may fit the bill for the acquisition. However, Cohen told The Journal he believes that match could be in the consumer or retail industry. The billionaire has a strong carrot motivating him to fulfill this purchase. Earlier this month, the board of directors announced it had voted to increase Cohen\u2019s pay package to more than $35 billion awarded entirely in stock options\u2014if he is able to increase the company\u2019s market capitalization to $100 billion and achieve $10 billion in Cumulative Performance EBITDA. For context, Cohen has increased the company\u2019s market capitalization from $1.3 billion in 2021 to approximately $9.3 billion, a 615% increase in stockholder value, though a far cry from the $100 billion goal.<\/p>\n What experts think is possible<\/strong><\/p>\n Michael Pachter, a managing director of equity research at wealth management firm Wedbush Securities, is highly skeptical of Cohen\u2019s ability to fulfill the acquisition. \u201cI might be able to give you a higher than 0.001% probability that it\u2019ll get to $100 billion,\u201d Pachter told Fortune<\/em>. \u201cBut I take the underside of that bet. I\u2019d say no, not going to happen.\u201d Pachter\u2019s doubt is rooted in the fact that Cohen has yet to demonstrate an idea or a unique competitive advantage beyond his company\u2019s cash pile, which was valued at $8.83 billion in October.<\/p>\n The company has struggled to modernize in recent years amid a series of strategic missteps. Last May, GameStop attempted to woo crypto enthusiasts after it said it purchased 4,710 Bitcoins, at the time worth about $500 million, in an attempt to amend the company\u2019s falling profits. The move gave the company\u2019s stock an initial bump but soon tumbled 10% the day after the announcement. And in June, Cohen said in a quarterly investor call the video game retailer would focus on trading card sales, sending the company\u2019s stock tumbling 20%.<\/p>\n \u201cHe goes into a business where the physical game model is threatened by the digital download model and he\u2019s just helpless,\u201d Pachter said. \u201cThere\u2019s nothing he can do to make that better.\u201d<\/p>\n Cohen is no stranger to large-scale acquisitions. The billionaire first made a name for himself after launching online pet food retailer Chewy, which was acquired by PetSmart for $3.35 billion and went public in 2019 with a valuation over $8 billion. Cohen has also been buying up GameStop stock. He is the company\u2019s biggest individual investor with a stake of over 9%. Though Pachter doubts Cohen can replicate his success.<\/p>\n \u201cIt\u2019s easy to say, \u2018I\u2019m going to be the next Warren Buffett,\u2019\u201d Pachter said. \u201cBut is Ryan Cohen a \u2018twice catching-lightning-in-a-bottle\u2019 guy? I don\u2019t know.\u201d<\/p>\n The company stock saw a recent boost after hedge fund investor Michael Burry, best known for his prescient short of the U.S. housing market ahead of the 2008 financial crisis, said he\u2019s been buying shares of GameStop\u2019s stock. Burry has recently invested in the company\u2019s stock, detailing his GameStop stake in a Substack post on Jan. 26, saying he is buying the company\u2019s shares as part of a long-term investment plan.<\/p>\n \u201cI believe in Ryan,\u201d Burry wrote in the post, referring to Cohen. \u201cI like the setup, the governance, the strategy as I see it. I am willing to hold long-term, and I am excited to see where this goes.\u201d<\/p>\n<\/div>\n #years #short #squeeze #GameStops #CEO #betting #genius #totally #foolish #billionplus #acquisition<\/p>\n","protected":false},"excerpt":{"rendered":" GameStop was once the go-to de… <\/p>\n","protected":false},"author":1,"featured_media":17309,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[2],"tags":[1471,2775,11173,529,1442,11172,11167,11170,9117,576,11168,4965,11169,11171,84],"_links":{"self":[{"href":"https:\/\/microvibenews.com\/index.php?rest_route=\/wp\/v2\/posts\/17308"}],"collection":[{"href":"https:\/\/microvibenews.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/microvibenews.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/microvibenews.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/microvibenews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=17308"}],"version-history":[{"count":0,"href":"https:\/\/microvibenews.com\/index.php?rest_route=\/wp\/v2\/posts\/17308\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/microvibenews.com\/index.php?rest_route=\/wp\/v2\/media\/17309"}],"wp:attachment":[{"href":"https:\/\/microvibenews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=17308"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/microvibenews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=17308"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/microvibenews.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=17308"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}