Stoppage of play wants to acquire a publicly traded consumer company much larger than the video game retailer in a deal that could be “transformational” for the company, CEO Ryan Cohen told CNBC in an interview Friday.
“It’s going to be really big. Really big. Very, very, very big,” Cohen said of the size of the acquisition. “It’s transformational. Not just for GameStop, but ultimately, within the capital markets…it’s something that’s really never been done before in the history of the capital markets.”
Cohen declined to name the company’s goals — saying only that he was looking for a publicly traded consumer company that is undervalued, “high quality, durable, scalable with growth prospects” and has a “sleepy management team” at the wheel. He said that if the investment comes to fruition, it has the “potential to make [GameStop] worth several hundred billion dollars. »
“If it works, it’s genius. If it doesn’t work, then, you know, it’s totally, totally stupid,” agreed Cohen, co-founder and former CEO of Chewy. “But I believe we have the components to make it work, and I’m very confident in the ability to make the asset much, much, much more efficient…we have the governance structure, we have the capital, we have the operational expertise.”
While Cohen transformed GameStop from a formerly dying retailer into a lucrative business, it’s unclear how an acquisition in the consumer space could increase its value to more than $100 billion — a Herculean task for a company with a market cap of $10.5 billion.
An investment banker in the consumer and retail sector was skeptical of Cohen’s ability to pull this off, saying very few companies in the sector could increase GameStop’s value so dramatically.
“I’ve never seen him,” the person said. “Unless you’re talking about radically transforming a business model or something like that, it’s just not happening in retail.”
Another agreed.
“It’s easy to say something,” the person said. “It’s a lot harder to do.”
GameStop’s ambitions to increase size first emerged in early January. The company unveiled a new all-or-nothing equity incentive for Cohen that will only be paid if it reaches a market capitalization of $100 billion and records $10 billion in cumulative earnings before interest, taxes, depreciation and amortization.
If GameStop’s acquisition plans succeed and its market value reaches $100 billion or more, Cohen will get his payday — but he said he hopes “all shareholders will, too.”
Since taking over as CEO of GameStop in September 2023, Cohen has significantly cut costs, improved the retailer’s profitability and grown its collectibles business, even as overall sales have fallen.
Between GameStop’s third quarter of fiscal 2023, when Cohen took over, and its third quarter of fiscal 2025, its most recent quarter, GameStop’s gross margin increased 7 percentage points and net income soared to $77.1 million, from a loss of $3.1 million. In fiscal years 2024 and 2025, the retailer reported consecutive annual net profits after five consecutive years of losses.
The company’s success has attracted the interest of Michael Burry – the investor who rose to fame after betting against the US housing market before the financial crisis – who recently revealed he was buying shares.
“Ryan makes lemonade out of lemons,” Burry said in an article published Monday by Substack. “He has a shitty business, and he treats it the best he can while taking advantage of the meme stock phenomenon to raise money and wait for an opportunity to make a big purchase in a real growing cash cow company.”
Over the past two years, GameStop has also accumulated more than $9 billion in cash between available cash and tradable securities – money the company used to invest in Bitcoin.
When asked whether GameStop would liquidate its bitcoin holdings to help fund its acquisition plans, Cohen said he was “not ready to say” but called his new strategy “much more compelling than bitcoin.”
“It’s similar to Berkshire Hathaway, except what Berkshire has done for decades, we’re trying to do in a much shorter time frame in terms of value creation,” Cohen said. “We can go out there and apply the Soft And [GameStop] So we could capture a lot more value by focusing on this under-optimized asset and then maybe move on to the next one, but, you know, we’ll see what happens. “