Is It GameStop's Time? Ryan Cohen's $10M Investment Sparks Investment Rethink

When the internet throws around the phrase “what time is it,” investors watching GameStop just got a fresh signal worth paying attention to. Late last month, Securities and Exchange Commission filings revealed that Chewy founder Ryan Cohen—who took over as GameStop’s CEO in late 2023—has been aggressively accumulating stock in the company. Cohen acquired 500,000 shares at an average price of around $21.12 per share, totaling over $10.5 million in fresh investment. Today, he controls approximately 9% of the company’s outstanding shares. When insiders with track records like Cohen’s start buying their company’s stock in meaningful quantities, it typically signals bullish conviction about where things are headed.

The question now facing investors: Should this move make us reconsider GameStop after years of skepticism?

The Chewy Founder’s Strategic Gambit: Why Cohen’s $10M Matters

Ryan Cohen didn’t become an unlikely celebrity in finance circles by accident. His track record building Chewy from a startup into a $35 billion acquisition target gave him credibility. Yet when he jumped into GameStop during the early meme stock frenzy, few expected him to actually run the company. That changed in late 2023 when he assumed the CEO role. Ever since, he’s been methodically trying to reshape a business that everyone agrees had a fundamental problem: selling video game discs and consoles in a world rapidly going digital.

The $10 million share purchase is telling. It’s not a token gesture. It suggests Cohen genuinely believes in his turnaround thesis and is putting real money behind it. His continued accumulation of shares signals he’s not just collecting a salary—he’s gambling his own wealth on the company’s future.

From Dying Retailer to Digital Hub: GameStop’s Transformation Unfolds

The traditional narrative around GameStop is that the brick-and-mortar video game retail business is fundamentally broken. That part hasn’t changed. However, Cohen’s strategy isn’t about defending the old model—it’s about building something entirely different within the same corporate shell.

The results, so far, are mixed but directionally encouraging. Through the first ten months of 2025, GameStop’s hardware business (video game consoles and related equipment) experienced roughly a 5% decline—hardly a catastrophic collapse for a business widely expected to disappear. Meanwhile, the software division continues to struggle, with revenue dropping 27% year-over-year. That’s the part of the business that’s genuinely leaking value.

But here’s where it gets interesting: GameStop’s collectibles division, which encompasses apparel, toys, trading cards, and gaming gadgets, has exploded with 55% revenue growth in the same period. This suggests Cohen’s diversification strategy is actually finding real customer demand. Simultaneously, the company has been aggressively cutting costs and reducing its physical footprint, steps that have improved cash flow metrics significantly.

The financial snapshot is notably healthier than it was a year ago. Through the first ten months of 2025, GameStop generated $0.67 in diluted earnings per share, a substantial improvement compared to the same period in 2024. That improvement came despite a modest 21% stock price decline over the full year—a disconnect that suggests the market hasn’t fully priced in the operational improvements.

Better Numbers, But Is the Valuation Justified?

Here’s where the analysis gets thorny. GameStop currently trades at a $9.7 billion market valuation. At that price, the stock sits at approximately 2.3 times its trailing revenue and around 22 times forward earnings expectations. According to available Wall Street analysis, one analyst projects nearly $1 in diluted earnings per share for 2026 and roughly $4.16 billion in total revenue—both representing year-over-year growth.

Those forward-looking numbers matter. Yet they also raise an uncomfortable question: Is that valuation reasonable for a company that still hasn’t stabilized revenue in its largest business segment? GameStop remains very much in transition. The collectibles business shows promise, but it’s not yet clear whether it can grow large enough to offset the ongoing struggles in software and the gradual decline of hardware.

The company can almost certainly continue improving profitability through cost cuts and operational efficiency. But that’s a strategy with limits. Eventually, you need growth to justify premium valuations.

Should You Follow Ryan Cohen’s Lead?

Cohen’s $10.5 million investment decision carries weight, but it’s not a universal signal for individual investors to dive in. His perspective differs from a typical retail investor’s in crucial ways: He controls the company’s direction, can influence strategic decisions, and has executive compensation tied to long-term outcomes. Those advantages don’t necessarily extend to external shareholders.

The Motley Fool’s Stock Advisor team, a respected voice in retail investing, notably excluded GameStop from their latest recommendation list of the 10 best stocks to own right now. That’s significant. It’s not because GameStop is necessarily a bad company—it’s because the risk-reward profile doesn’t stack up as favorably as other opportunities available to investors today.

What GameStop represents is a genuine turnaround story with some early positive signals. The collectibles business validates Cohen’s diversification logic. The improved cash flow and earnings per share demonstrate operational competence. But the valuation remains stretched relative to the company’s continued revenue instability in its core segments.

For investors wondering whether it’s “game time” for GameStop, the honest answer is: Maybe, but not yet. The transformation is real, and Cohen’s conviction is evident. Yet waiting for clearer evidence that the company can stabilize revenue at higher levels seems prudent. Sometimes the right move in investing isn’t buying early—it’s buying when you’re confident the turnaround is actually working.