GameStop (GME) Stock: Can Ryan Cohen Turn $9 Billion Into a $100 Billion Empire?

TLDR

• Ryan Cohen plans to transform GameStop through a major consumer or retail acquisition to reach $100 billion market cap
• Michael Burry purchased GameStop shares, comparing Cohen’s strategy to Warren Buffett’s Berkshire Hathaway approach
• Cohen stands to earn $35 billion if he successfully grows the company to the target valuation
• GameStop holds approximately $9 billion in cash for potential acquisitions
• Stock jumped 4.5% after acquisition plans were reported by The Wall Street Journal

Ryan Cohen is making a high-stakes bet on GameStop’s future. The CEO plans a major acquisition to transform the video game retailer into a $100 billion company.

GameStop Corp., GME

The transformation comes with a massive personal incentive. Cohen stands to unlock a $35 billion payout if he reaches the market cap target.

GameStop shares rose 4.5% in Friday trading after the acquisition report. Investors appear optimistic about Cohen’s vision for the company.

Michael Burry Backs the Vision

Michael Burry has returned as a GameStop shareholder. The investor famous for predicting the 2008 housing crisis isn’t betting on the retail business this time.

Burry believes Cohen can become the next Warren Buffett. He thinks GameStop could evolve into a Berkshire Hathaway-style holding company.

The Cash and the Plan

GameStop’s $9 billion war chest gives Cohen serious acquisition firepower. He’s looking for targets with stagnant management teams that need fresh leadership.

Cohen already owns about 42.1 million GameStop shares. That represents roughly 9% of all outstanding shares.

He could receive options on more than 171.5 million additional shares. The options depend on meeting specific performance goals tied to market cap growth.

Since joining the board in January 2021, Cohen has helped GameStop outperform the S&P 500. He’s added digital commerce and invested in collectibles and Bitcoin.

Can Cohen Become the Next Buffett?

The Berkshire Hathaway comparison carries weight. Warren Buffett bought Berkshire in 1962 as a struggling textile manufacturer and completely redefined it.

Buffett invested in high-quality companies during market downturns. His acquisitions of American Express and Coca-Cola became legendary.

Cohen has made similar moves on a smaller scale. He’s reinvented GameStop’s dying retail business and made strategic investments.

However, Cohen hasn’t yet made acquisitions comparable to Buffett’s biggest wins. The Bitcoin purchase remains his only major outside investment.

His compensation structure mirrors other moonshot executive deals. Tesla recently approved a similar framework for Elon Musk.

Burry noted that Cohen is managing a declining core business while waiting for the right opportunity. The $9 billion cash position gives him patience to wait for the perfect target.

Cohen’s ability to build a diversified conglomerate remains unproven. The coming months will reveal whether his acquisition strategy succeeds or fails.

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