GameStop Debuts ‘Alarming’ Plan To Let Its CEO Gamble Millions On The Stock Market

GameStop, the darling of the WallStreetBets retail-trading movement, has decided to allow CEO Ryan Cohen to start gambling the company’s excess cash on the stock market. It's a highly unusual move that some financial analysts are calling “inane” and “alarming,” and the meme-stock community is celebrating as the first step toward the company becoming the next Berkshire Hathaway. 

The struggling 90s brand, which received new life in 2021 as retail traders piled in during the meme-stock era, had previously invested excess cash in comparatively boring fixed income securities, a more traditional place to park a company’s money. But on Tuesday, the company’s board of directors approved a new, perplexing strategy to allow Cohen to toss its more than $900 million excess cash and equivalents into the stock market, meaning that GameStop—and its stockholders—would essentially be betting on other corporations. 

As part of the new agreement, Cohen has not only received the “authority to manage” GameStop’s investments—along with anyone else he sees fit—but is allowed to invest his own money in the same companies as well. The company argued in a filing that the arrangement made perfect sense because it “[aligns] the interests” of Cohen and GameStop by placing “the personal resources of Mr. Cohen at risk in substantially the same manner.” With its legions of online fans, GameStop investing in a company could be enough to boost that company's stock, and perhaps personally enrich Cohen as well. 

Some analysts immediately called out the move as TK. “What could go wrong?” financial analyst Adam Crisafulli sarcastically wrote on Twitter in one representative quip. The investment firm Wedbush Securities, which has long been critical of the company, called the decision “alarming” and “one of the most inane moves we have ever seen” in its latest report on the company. 

WedBush argued that investors did not “need GameStop to act as a mutual fund,” since there are already a lot of those, and that the decision implied GameStop believed it could get “better returns by buying equities aside from its own.” Instead of betting cash on the stock market, WedBush suggested the company use the money to buy back stock, like a normal company. 

But GameStop is not a normal company, and it hasn’t been for some time. It is a meme-riding powerhouse, spearheaded by Cohen, who has been ordained with a cult-like status among his subreddit-lurking followers. WedBush itself acknowledged this, saying the share price has long been “disconnected from reality” as a result of meme stock mania and its aftermath. 

Predictably, the decision was celebrated by members of the now-infamous investing Reddit forum WallStreetBets and similar online investing communities, some of whom suggested (incredibly incorrectly) that the company was transforming into a hedge fund, which invests rich people’s money, but who more generally suggested that the company had essentially turned itself into the corporate equivalent of WallStreetBets. 

“Ryan is doing a WSB YOLO and will take the cash pile from the company and gamble it in the stock market near the all time high,” said one person in a post that was subsequently removed from the forum by a moderator who called GameStop fans a cult. "They hate hedgefunds! But wait… now they are one!!! Bullish," the moderator wrote in one comment. "Dumbest fucking people on the planet."

“It is as prophesied - boomer Charlie Munger has died, and Ryan Cohen has arisen!” another poster wrote in the same thread. 

"Let's go baby! This is an unexpected way to hopefully create generational wealth," wrote one user on the r/superstonks subreddit. 

The enthusiasm was not limited to Reddit. Justin Dopierala of DOMO Capital Management, longtime believer in GameStop who bet big on the company ahead of its 2021 rise and was featured in the documentary "GameStop: Rise of the Players," said he had hoped the company would adopt this approach for some time and could be “completely game-changing.”

“Welcome to the new Berkshire Hathaway!” his firm wrote on Twitter. 

Probably not, but if Cohen decides another company is the new GameStop, and bets the farm on them, who’s to say his disciples won’t follow his lead?