You’ve probably heard a little bit about the crazy stock market gains being experienced by GameStop this week. If you have not heard of it in any way, the long story is that a group of regular traders got together on the Reddit Forum and basically conspired to send the share prices of some companies to the moon. One of those companies in GameStop. The stock was $ 4 a year ago. It was around $ 8 in September. Ten days ago it was around $ 40. It was $ 346 yesterday. If you managed to buy 1,000 shares while trading for $ 8, then tomorrow your account will be worth $ 340,000. Man that would be a terrible feeling. Nobody imagines what it would look like if you shared 1,000 shares, not 10,000, not 100,000 … but $ 9 million shares back in September for $ 8. Ryan Cohen doesn’t have to imagine that feeling.
Who is Ryan Cohen?
A decade ago Ryan co-founded online pet food / toy company Chewy.com. He and his co-founders were rejected by more than 100 VC firms in 2013 before infusing $ 15 million in capital. In 2016, Chewy raised $ 230 million. The same year the company earned $ 900 million in revenue. In 2017 Chewy raised $ 350 million. Later that same year, Chewy was acquired by PetSmart for $ 3.35 billion. PetSmart made Chewy public in 2019. Today, Chewy has a market cap of $ 43 billion.
Cohen took cash gains of several hundred million in the original PetSmart sales.
In June 2020, Ryan made headlines when he announced he wanted to raise his entire fortune in two stocks: Apple and Well Fargo. His Apple stake is reportedly worth more than $ 500 million today.
As it turns out, he was slightly fibrous. We now know that he has also bought stock in a third company. Third company?
In August 2020, 35-year-old Cohen was forced to file an SEC. He was forced to do so as he was acquiring shares in the mall video game retailer Gametop and his position had become so large that it necessitated the SEC’s disclosure.
The size of his position? 9 million shares.
He spent an average of $ 8 to acquire his stake, which is about 10% of the company. In total Ryan spent $ 76 million in Peking, combining his 9 million shares.
In November Ryan posted a public letter to GameStop’s board of directors that destroyed the company’s performance. The company’s share price at that time was approximately $ 10. Five years ago, the share price was about $ 30.
A week ago GameStop was at $ 42. People thought it was crazy because it was double where it was a few weeks ago.
GameStop hit $ 483 for a brief moment on Thursday.
At $ 483, Ryan’s 9 million shares were valued at $ 4.3 billion.
GameStop ended on Thursday at $ 193. At that level, Ryan has a stake of $ 1.74 billion.
Who knows where this is going. There is nonsense on Reddit that the conspirators who started this frenzy want to send the price of the gametop to $ 5,000. As crazy as it sounds, it is as crazy as imagining a stock a few months ago where it is today.
If somehow GameStop goes up to $ 5,000, Ryan Cohen’s stake would be $ 45 billion.