GameStop stock rallies 5% as CEO Ryan Cohen announces megadeal that'll lift valuation to $100B

GameStop jumped 5% Friday after CEO Ryan Cohen confirmed the company is trying to buy a much bigger public consumer company. He called it a “really big” deal that could change everything for the business, and even Wall Street.Ryan allegedly told CNBC the target is still secret but hinted it’s a company that’s undervalued, solid, and has room to grow.“It’s transformational.Not just for GameStop, but for capital markets,” he said.“This is something that really has never been done before.”Ryan didn’t give a name but said it’s a consumer company with a lazy management team, and GameStop plans to step in and fix that.Cohen outlines deal, says GameStop has tools to pull it offRyan explained what kind of company he’s looking for. It has to be high quality, durable, and scalable. He thinks it can be made way more efficient. “We’ve got the governance structure, we’ve got the capital, we have the operational expertise,” he said.He also admitted the whole thing is a bet. “If it works, it’s genius. If it doesn’t work, then, you know, it will be totally, totally foolish.” He added, “We can apply the Chewy and GameStop mindset of like brutal efficiency and increase the profitability very, very quickly.”Ryan compared what he’s trying to do to Berkshire Hathaway, saying GameStop is trying to create value fast. “It’s similar to Berkshire Hathaway, except what they did in decades we’re attempting to do in a much shorter time.”The company is pushing toward $100 billion in value, even though it’s only worth about $10.5 billion right now. That’s a huge jump. Some investment bankers doubt it’s even possible. One said, “I’ve never seen it. Unless you’re talking about radically transforming a business model or something, it just doesn’t happen in retail.” Another added, “It’s easy to say something. It’s a lot harder to do it.”Incentive plan links $100B goal to Cohen’s payoutBack in January, GameStop rolled out a new equity bonus plan just for Ryan. He only gets it if the company hits $100 billion in value and earns $10 billion in total EBITDA. When asked about that, Ryan said, “I hope all shareholders do” benefit, not just him.Since he took over as CEO in September 2023, Ryan has cut costs, made operations leaner, and pushed the collectibles business harder. Even though sales are still weak, the company’s profit numbers have turned around. From fiscal Q3 2023 to fiscal Q3 2025, gross margin grew by 7 points. Net income hit $77.1 million, up from a $3.1 million loss. For 2024 and 2025, GameStop posted back-to-back annual profits, something it hadn’t done in six years.The plan isn’t just talk. GameStop has over $9 billion in cash and marketable securities, built up through stock offerings and investments. Some of that money had gone into bitcoin. But now, when asked if the company will sell its bitcoin holdings to pay for the buyout, Ryan said, “I’m not prepared to say,” but added that the new strategy is “way more compelling than bitcoin.”Investor Michael Burry, famous for betting against the housing bubble, recently said he’s been buying shares.“Ryan is making lemonade out of lemons,” Burry wrote in a Substack post. “He has a crappy business, and he is milking it best he can while taking advantage of the meme stock phenomenon to raise cash and wait for an opportunity to make a big buy of a real growing cash cow business.”Ryan says once this deal is done, there could be more. “Eventually we could move on to the next one,” he said. “But, you know, we’ll see what happens.” If you're reading this, you’re already ahead. Stay there with our newsletter.