GameStop (GME) shares saw a notable increase in value during extended trading on Tuesday, following an announcement from CEO Ryan Cohen regarding a substantial acquisition of company stock. This development underscores growing investor confidence in the retail gaming giant, particularly given its recent financial turnaround and increasing market valuation under Cohen's leadership.
A recent filing with the U.S. Securities and Exchange Commission (SEC) revealed that Ryan Cohen acquired an additional 500,000 shares of GameStop. The average price paid for these shares was approximately $21.12. This latest purchase significantly boosts Cohen's total ownership in the company. His current stake now stands at 41,582,626 shares, which also includes roughly 3.7 million warrants. This expanded holding represents 9.2% of GameStop's total shares, demonstrating a deep personal commitment to the company's future.
The SEC filing further indicated that Cohen has invested approximately $117.4 million of his personal funds over time to build this substantial position. This long-term financial commitment from the CEO is often viewed positively by the market, signaling strong belief in the company's strategic direction and potential for growth.
Earlier in January, GameStop's board of directors formalized a long-term performance award for Ryan Cohen. This stock option grant is designed to vest upon the achievement of specific financial benchmarks, such as the company reaching a market capitalization of $100 billion and cumulative EBITDA of $10 billion. If these ambitious goals are met, the award could be valued at around $35 billion, aligning Cohen's personal financial success directly with the company's performance.
Since Ryan Cohen's involvement with GameStop's board, the company has witnessed remarkable growth. Its market capitalization has soared from $1.3 billion to $9.3 billion, marking an impressive increase of approximately 600%. This period of growth has also coincided with a significant improvement in GameStop's financial health. The company transitioned from a net loss of $381.3 million in fiscal year 2021 to a net income of $421.8 million over the past four fiscal quarters, indicating a strong operational and financial recovery.
The market reacted positively to the news of Cohen's increased investment, with GameStop shares climbing 3.41% to $21.82 in after-hours trading on Tuesday. This upward movement reflects investor enthusiasm and a renewed sense of optimism surrounding the company's prospects, driven by both its strategic leadership and improved financial standing.