GameStop (GME) Stock: Chairman Cohen Increases Stake to 9.2% with $10.5M Buy

TLDR

• GameStop Chairman Ryan Cohen purchased 500,000 additional shares on January 20 at a weighted average price of $21.12 per share
• Cohen’s ownership stake increased to 9.2% of GameStop, totaling 41,582,626 shares worth approximately $10.56 million in this transaction
• GameStop stock rose 3.7% to 4% in after-hours trading following the announcement of Cohen’s purchase
• Cohen has invested roughly $117.4 million of his own money over time to build his current position in the company
• The company awarded Cohen a performance-based stock option earlier this month for 171.5 million shares with a $100 billion market cap vesting target

GameStop stock jumped 4% in after-hours trading Tuesday after Chairman Ryan Cohen bought more shares. The purchase came through open market transactions on January 20.

Cohen acquired 500,000 shares at prices between $20.81 and $21.20 per share. The weighted average price came to $21.12 per share. The total transaction value reached approximately $10.56 million.

A Schedule 13D filing with the Securities and Exchange Commission revealed the details. The filing showed Cohen now owns 41,582,626 GameStop shares. This represents about 9.2% of the company’s outstanding stock.

GameStop Corp., GME

His holdings include 37,847,842 shares owned directly. The remaining 3,734,784 shares come from warrants received through a previous warrant dividend distribution.

Cohen has put serious money into GameStop over time. The filing indicates he has invested roughly $117.4 million of his own funds to build his current position. That’s real skin in the game.

The Chewy founder first took a 9% stake in GameStop back in August 2020. This happened during the height of the meme stock phenomenon. He joined the board in 2021 and became Chairman that June.

Cohen’s Leadership Journey

GameStop promoted Cohen to President and CEO in September 2023. He agreed to serve without compensation while maintaining his chairman role. The dual position gives him direct control over the company’s strategic direction.

The company’s market value tells an interesting story. When Cohen joined the board in 2021, GameStop had a market cap around $1.3 billion. Today it sits at approximately $9.45 billion. That’s a gain of over 600%.

During the 2021 meme stock frenzy, the valuation peaked at around $34 billion. The stock has pulled back from those highs. GME shares declined 23.2% over the past year.

Performance-Based Compensation

Earlier this month, the board gave Cohen a massive performance-based stock option. The grant covers 171.5 million shares at $20.66 per share. The potential value could reach $35 billion.

The option comes with tough conditions. It fully vests only if GameStop reaches a $100 billion market capitalization. The company also needs to achieve $10 billion in cumulative EBITDA.

GameStop has shown financial improvement under Cohen’s watch. The company posted a net income of $421.8 million over the most recent four fiscal quarters. This marks a turnaround from earlier losses.

The video game retailer continues working through challenges in the retail gaming sector. Physical game sales have declined as digital downloads grow. The company has been adapting its business model.

Cohen’s latest share purchase signals his confidence in GameStop’s direction. The timing comes as the company works to prove it can sustain profitability. Investors clearly responded positively to the news.

The weighted average purchase price of $21.12 sits close to recent trading levels. This suggests Cohen sees value at current prices rather than waiting for a dip.

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