Ryan Cohen’s GameStop Gambit Raises Specter of His Spotty Record
Billionaire Ryan Cohen's appointment to lead GameStop Corp. drew cheers across the social-media platforms that made him a meme-stock icon. But investors may want to hold the applause based on his spotty record of making money for them.
Cohen, who helped spark a more than 2,000% surge in the video-game seller's shares in early 2021, was named the firm's chief executive officer on Thursday. He takes his post just as the movie Dumb Money, based on the GameStop trading frenzy that burned hedge funds and enriched small investors at the time, hits theaters nationwide.
The company's shares are now 80% below their January 2021 peak. And Wall Street is skeptical that Cohen will be able to engineer a turnaround, regardless of the retail crowd's euphoria and forgiveness of the poor performance of other companies in which he's taken large stakes.
“Cohen's appointment ensures GameStop's demise,” Wedbush's Michael Pachter, one of three analysts tracking the stock, said Thursday.
Retailers Bed Bath & Beyond Inc. and Nordstrom Inc. have also delivered losses to the individuals who bought and held after reports Cohen had taken a stake. And Alibaba Group Holding Ltd.'s stock has slumped since the January report that Cohen had built a holding.
In a memo to employees Thursday, Cohen emphasized GameStop's need to be profitable and said “extreme frugality” is needed, CNBC reported.
“I'm not getting paid, so I'm either going down with the ship or turning the company around. I much prefer the latter,” he said in the memo, according to CNBC.
Representatives for Cohen and GameStop didn't respond to emails and phone calls seeking comment.
He became an idol to individual investors after gaining a seat on GameStop's board in January 2021 as shares
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