The Resurgence of a Meme Stock: Why Ryan Cohen's $10 Million Bet on GameStop Deserves Fresh Attention

GameStop has remained firmly in the spotlight since its dramatic surge during the height of meme stock mania, maintaining a devoted following despite its volatility. Yet the narrative surrounding this meme stock has shifted considerably over the past few years. What once was purely a speculative phenomenon now reflects genuine business transformation efforts, particularly since Ryan Cohen, founder of Chewy, stepped in as CEO in late 2023. Recent securities filings reveal that Cohen has made a substantial commitment to the company’s future, purchasing 500,000 shares at an average price of approximately $21.12 per share—representing over $10.5 million in personal investment. This acquisition brings his total ownership stake to more than 9% of outstanding shares, a meaningful signal of insider confidence.

CEO’s Major Stock Purchase Signals Bullish Conviction

When company leadership makes substantial personal share purchases, it typically indicates strong conviction in the company’s direction and valuation. Cohen’s half-million share acquisition falls squarely into this category. Such insider buying patterns have historically preceded periods of improved stock performance, though past results never guarantee future outcomes. What makes Cohen’s investment noteworthy isn’t just the dollar amount, but the timing and his demonstrated commitment to steering GameStop toward profitability rather than merely riding speculative waves.

The significance of this move lies in the message it sends about management’s internal view of the company’s trajectory. For a meme stock historically driven by retail sentiment and social media momentum, having leadership willing to deploy substantial personal capital suggests a confidence that extends beyond market noise.

How GameStop is Transforming Beyond Its Meme Status

Since taking the helm, Cohen has pursued multiple strategic initiatives to diversify GameStop’s revenue streams and reduce reliance on the declining brick-and-mortar video game retail sector. The company has ventured into collectibles—a rapidly growing category encompassing apparel, toys, trading cards, and gadgets—which surged 55% in revenue during the first ten months of 2025. Simultaneously, GameStop has begun building a cryptocurrency treasury strategy, purchasing Bitcoin to hedge against currency devaluation and align with modern asset management practices.

The company is simultaneously executing a disciplined cost reduction program. By shrinking its physical retail footprint and optimizing operations, GameStop has significantly enhanced its cash generation capabilities. The hardware business, which includes console and peripheral sales, has remained relatively stable rather than experiencing the steep decline many industry observers predicted. However, the software segment continues to face headwinds, declining 27% year-over-year during the period.

This divergence—stable hardware, declining software, but rapidly expanding collectibles—reveals a company in active transformation rather than free fall. The collectibles growth rate suggests that Cohen’s strategy of repositioning GameStop as a diversified entertainment and collectibles retailer (rather than a pure gaming vendor) is gaining traction.

Financial Progress Provides Foundation, Though Questions Remain

GameStop’s financial health has measurably improved. Through the first nearly ten months of 2025, the company generated $0.67 in diluted earnings per share—a substantial improvement compared to the prior year’s equivalent period. Operating cash flow increased meaningfully, indicating the company’s ability to generate actual cash rather than merely accumulating debt.

Currently trading at a market capitalization of $9.7 billion, GameStop’s valuation metrics present a mixed picture. At approximately 2.3 times revenue and roughly 22 times forward earnings (based on Wall Street’s projection of close to $1 EPS in 2026), the stock appears modestly priced for a turnaround story. The lone analyst covering the stock projects 2026 revenue of $4.16 billion, representing growth from current levels.

However, this valuation requires GameStop to successfully stabilize and eventually grow its largest business segment—hardware—while the software division continues its descent. The collectibles growth is encouraging, but must accelerate considerably to offset declines elsewhere and demonstrate that the company’s transformation is genuine rather than temporary.

The Timing Question: When Does Wall Street Reconsider This Narrative?

For investors accustomed to thinking of GameStop purely as a meme stock fueled by social media phenomena, the current moment presents a critical reassessment opportunity. The company’s financial trajectory, CEO’s personal investment, and genuine business restructuring efforts distinguish the current period from earlier speculation-driven cycles. Yet whether these improvements prove sufficient to justify expanded valuation multiples remains an open question.

The challenge for traditional investors is determining whether this window represents a legitimate opportunity or merely a more sophisticated version of the speculative cycle. While cost management can continue, the company ultimately must achieve revenue growth in its core businesses to validate the current market valuation. Until the hardware segment stabilizes and collectibles demonstrate they can become a meaningful revenue driver, the earnings multiple may continue to look stretched relative to the company’s proven execution.

For those inclined to monitor this situation, the narrative around this meme stock is evolving—but the investment thesis still requires compelling proof points before representing a compelling opportunity for traditional value investors.