GameStop $GME ( ▲ 8.25% ) shares are climbing again as CEO Ryan Cohen keeps fanning the flames around a potentially huge acquisition.
The stock was up another 2 percent in premarket trading Monday after a flurry of media teases. Late Friday, CNBCreported that Cohen wants GameStop to buy a company much larger than itself, with the long shot upside of turning the retailer into a business worth “several hundreds of billions of dollars.” That followed his comment to The Wall Street Journal that he is pursuing a “big” deal that could either be “genius or totally, totally foolish.” Shares jumped nearly 5 percent Friday on the buzz alone.
Deal Talk Doing the Heavy Lifting
Cohen had also been scheduled for a Monday appearance on Fox Business, but the interview was scrapped. According to anchor Charles Payne, the cancellation was because Cohen is “working on something monumental” and would not be able to say much publicly. Adding to the spectacle, investor Michael Burry had said he planned to publish a list of potential acquisition targets ahead of the interview.
The sudden media tour is a sharp change for Cohen, who has largely avoided the spotlight since taking over. But the incentive is clear: his compensation is now directly tied to boosting both GameStop’s market value and its cumulative EBITDA.
Moonshot or Mirage
Under the new pay package, Cohen only begins receiving stock options if GameStop’s market cap surpasses 20 billion dollars and the company generates 2 billion dollars in cumulative EBITDA from Q1 2026 onward. GameStop has only cleared that valuation during the 2021 meme stock frenzy, and it took roughly a decade to rack up its most recent 2 billion dollars in cumulative EBITDA.
In other words, this is not just storytelling. Cohen needs a truly transformative move, and fast, if he wants his bet on a blockbuster acquisition to pay off.