- Ryan Cohen became something of a meme icon among retail investors after his investment in GameStop just before the big short squeeze of 2021.
- Not satisfied with just being an investor, though, Cohen became GameStop’s Chairman of the Board; he has been focused on executing a turnaround plan at the company.
- Since first opening a long position in GameStop in August 2020, Cohen has not sold a single share.
Understanding the “Ryan Cohen Factor”
Ryan Cohen is an activist investor with an irreverent personality, a love for dark humor, and a heavy presence on social media (especially Twitter).
Cohen is also the co-founder and former CEO of Chewy (CHWY) - Get Free Report, the now-famous pet e-commerce company. Cohen helped start Chewy in 2011 when he was just 25 years old. Just six years later, in 2017, he sold Chewy to PetSmart in a $3.3 billion deal.
Since then, Cohen has become deeply involved in the investing world. Cohen is Apple's (AAPL) - Get Free Report largest individual, non-institutional investor, owning 6.2 million shares. In addition, he has significant investments in banks including Wells Fargo (WFC) - Get Free Report, Citigroup (C) - Get Free Report, and tech giants such as Netflix (NFLX) - Get Free Report and, more recently, Chinese e-commerce giant Alibaba (BABA) - Get Free Report.
Ryan’s investment philosophies, according to his own statements, are based on the teachings of his father, Ted Cohen, and other famed investors, including Warren Buffett and Carl Icahn. Ryan has focused, in particular, on the latter two’s dedication to value investing and shareholder activism (respectively).
Through his holding company RC Ventures, Ryan Cohen became one of the biggest characters in the GameStop short squeeze saga. Cohen bought a large portion of the company in 2020 and saw them skyrocket in value during the meme mania of January 2021.
But Cohen’s involvement with GME did not end with his being a mere shareholder. His investment in the company became a long-term commitment that eventually landed him a position as Chairman of GameStop's Board. As Chairman, Cohen has been at the helm of GameStop’s comprehensive turnaround plan.
The Greatest GameStop "Ape" Of All
Many dedicated GameStop retail shareholders (also known as "apes") are dedicated to holding their GME positions no matter what.
Currently, Cohen is GameStop's largest shareholder. Through RC Ventures, Cohen owns more than 12% of GME shares. That equates to about 36.4 million shares purchased since August 2020. Most of those shares were purchased in August 2020, at a post-4-to-1 stock split cost of between $1.25 and $1.50 per share, and in December 2020, at a post-split cost of between $3.25 and $4 per share.
However, Cohen's latest purchase of GameStop shares was in March of 2022. That (relatively small) 100,000-share purchase was at a post-split equivalent price of between $24 and $27 per share.
Cohen’s initial 2020 investment in GameStop saw a 5,000% appreciation at its peak. Today, those gains stand at an only slightly more modest 1,400%. Despite the roller coaster that GME shares have been on over the past couple of years, Ryan Cohen has not sold a single share of GME since entering his original long position.
Cohen, then, is perhaps the perfect role model of the GameStop “ape.”
Ryan Cohen has also demonstrated that he closely follows trends within GameStop's "ape" community. After news of his recent Alibaba acquisition circulated on his Twitter feed, Cohen reposted an image that had been made by a Reddit user from the largest forum dedicated to GameStop investors, r/superstonk.
Fully Committed to GameStop’s Future Success
Cohen was not satisfied just being GameStop's largest shareholder. Channeling his activist side, he ascended the company's board to become its Chairman and, in a pseudo-hostile-takeover move, enforced a general restructuring of the board of directors and replaced the company’s CEO.
Since GameStop's share price sat at stratospheric levels even after shares’ January 2021 peak, the company decided to issue equity to pay off debt and strengthen its balance sheet.
Cohen has used that cash to try to execute on his strategy for GameStop’s long-term growth.
That strategy has involved turning GameStop into a tech-oriented retail company; though Cohen has adopted a very discreet posture, providing few details about the company's concrete plans.
Important to note, however, is that GME’s 2021 share issuance (and resulting share dilution) happened before Cohen joined the company's Board. No further issuances have occurred since Cohen became Chairman. This is, perhaps, one of the most important reasons that GameStop stock has continued trading at high share price levels compared to other stocks that benefited from 2021’s "meme mania."
Although Cohen's plans for GameStop are still in progress, it is commendable that he has been able to balance the interests of the business and those of its massive retail shareholder base. And, unlike many other meme stocks that have come crashing down to earth in dramatic fashion, GameStop is still up 1,600% over the last three years.
(Disclaimers: this is not investment advice. The author may be long one or more stocks mentioned in this report. Also, the article may contain affiliate links. These partnerships do not influence editorial content. Thanks for supporting Wall Street Memes)