Ryan Cohen's $10 Million GameStop Stock Acquisition: Can This Meme Stock Make a Comeback?

When Chewy founder Ryan Cohen stepped into the GameStop CEO role in late 2023, the stakes were already sky-high for this polarizing meme stock. Now, recent SEC filings show Cohen has doubled down on his conviction, purchasing 500,000 shares at roughly $21.12 per share—a total investment exceeding $10.5 million. This move signals serious insider confidence, but the question remains: does it make sense for investors to reconsider this volatile equity?

The Insider’s Play: Why Cohen Keeps Loading Up on Stock

Cohen’s aggressive accumulation tells an important story. He now controls over 9% of GameStop’s outstanding shares, making him one of the company’s largest stakeholders. Insider buying of this magnitude typically reflects optimism about future prospects—yet it’s worth remembering that GameStop’s legacy as a brick-and-mortar video game retailer was already in terminal decline when Cohen took over.

What’s changed is Cohen’s strategic vision. Rather than accepting the inevitable death of physical game sales, he’s aggressively pivoting the company toward digital and alternative revenue streams. The stock has fluctuated wildly, trading down approximately 21% over the past year, but Cohen’s continued accumulation suggests he believes better days lie ahead for this once-embattled meme stock.

The Three-Business Breakdown: Signs of Progress and Persistent Headwinds

GameStop’s transformation manifests across three distinct business segments, each telling a different story:

The Hardware Business Under Pressure Hardware—primarily video game consoles and gaming peripherals—remains the company’s largest revenue driver but faces structural challenges. Through nearly the first ten months of 2025, this segment declined roughly 5%. While not catastrophic, the continued erosion underscores why Cohen needed to diversify away from pure gaming retail. This core business, historically the stock’s revenue engine, shows limited recovery potential.

Software’s Continued Struggles The software division, now the smallest revenue contributor, has hemorrhaged sales with a 27% year-over-year plunge. This segment’s deterioration reflects broader industry trends: digital distribution has made physical game sales nearly obsolete. For any investor considering the stock, this trajectory raises uncomfortable questions about GameStop’s core gaming positioning.

Collectibles: The Bright Spot Here’s where the narrative shifts. GameStop’s collectibles arm—encompassing apparel, toys, trading cards, and merchandise—has exploded with 55% revenue growth during the same period. This segment represents Cohen’s real bet: transform from a game store into a lifestyle and collectibles destination. If this momentum sustains, it could fundamentally change how investors evaluate the stock.

Financial Improvement: Real Progress or Accounting Relief?

The company’s balance sheet is undeniably healthier. Through the first ten months of 2025, GameStop generated $0.67 in diluted earnings per share, a dramatic improvement from the previous year’s depressed levels. Operating cash flow has swung sharply positive as the company shrinks its physical footprint and cuts unnecessary expenses.

With a market capitalization around $9.7 billion, the stock currently trades at approximately 2.3 times revenue. Wall Street’s lone analyst covering GameStop projects nearly $1 in EPS for 2026 and total revenue of $4.16 billion—both suggesting year-over-year expansion.

On the surface, these multiples seem reasonable. But here’s the tension: GameStop still hasn’t stabilized revenue in its largest business segment, and the company’s ultimate strategic identity remains unclear. The collectibles business is growing impressively, yet represents only a fraction of total revenue. Investors are essentially betting that this division can grow large enough to offset decline elsewhere—a wager that feels increasingly like a meme stock narrative rather than fundamental business certainty.

The Valuation Paradox: Why Forward Earnings Look Expensive

Measuring GameStop against historical metrics, the stock trading at 22 times forward earnings seems steep for a company still in strategic transition. While cost-cutting can support near-term earnings, these gains may mask underlying revenue challenges. The improving operational efficiency masks a troubling reality: GameStop hasn’t yet demonstrated it can grow total revenues, only manage them better.

This distinction matters enormously. A company can cut costs indefinitely, but eventually, top-line stagnation catches up with valuations. For a stock with such volatile history, the margin for error is razor-thin.

The Verdict: Cautious Skepticism Remains Warranted

Cohen’s $10 million stock purchase demonstrates genuine founder-level conviction. The collectibles acceleration is legitimately encouraging, and the financial improvements are real. Yet investors shouldn’t mistake operational improvements for a fundamental business turnaround.

The meme stock phenomenon has given GameStop a persistent audience of retail investors, and Cohen’s actions may reignite excitement around the equity. But enthusiasm alone doesn’t guarantee returns. Until GameStop proves it can grow revenues consistently—particularly in a business that makes economic sense post-transformation—the stock remains speculative for risk-conscious investors. The pieces are moving in the right direction, but the final picture remains too blurry to justify aggressive conviction, even with insider buying signals pointing bullishly.