GameStop Stock Climbs as Ryan Cohen Buys $28 Million in Shares, Extending Rally to Five Straight Weeks

NEW YORK — GameStop shares rose Monday, extending a monthlong rally fueled by a wave of insider buying led by Chief Executive Ryan Cohen, who has spent nearly $28 million on company stock in the past week.

The video game retailer's stock gained 46 cents, or 1.86%, to $25.16 in early trading on the New York Stock Exchange. The shares closed Friday at $24.70, up 2.45%, after Cohen disclosed his latest purchase.

GameStop stock has climbed about 30% over the past month and recorded its fifth consecutive weekly gain last week. The shares remain below their 52-week high of about $26.99 but well above the 52-week low of $17.79.

Cohen keeps buying

According to filings with the Securities and Exchange Commission, Cohen bought 700,000 shares of GameStop's Class A common stock on Oct. 2 at an average price of $24.41 per share, a purchase worth about $17.1 million.

That followed a purchase of 450,000 shares worth about $10.6 million on Sept. 29. The two transactions brought Cohen's direct holdings to 41,648,522 shares.

Cohen, who serves as GameStop's chairman, president and CEO, is the company's largest individual shareholder. He has led the company since January 2021, shortly after GameStop became the center of the meme-stock frenzy that sent its shares soaring and inflicted heavy losses on hedge funds that had bet against it.

Other insiders have also been buying. Director Nat Turner purchased 10,462 shares on Oct. 1 at about $24.33 each, according to an SEC filing.

Over the past 12 months, GameStop insiders have bought about $81.3 million in stock while selling only about $1.5 million, according to data compiled by GuruFocus.

Insider purchases are often viewed by investors as a sign of confidence, since executives typically buy shares when they believe the stock is undervalued.

Options activity surges

The insider buying has coincided with heavy options trading, a hallmark of GameStop's popularity among retail investors.

Call option volume surged to about 299,000 contracts on Sept. 30, well above the stock's average daily volume, with a put-to-call ratio of 0.25. A low ratio indicates that traders are buying far more bullish call options than bearish put options.

Retail investors on social media platforms have pointed to Cohen's purchases as a key reason for optimism, reviving some of the enthusiasm that has periodically sent the stock on sharp swings.

Profitability improves as sales fall

The rally also follows GameStop's second-quarter results, released Sept. 8, which showed improving profitability despite falling sales.

Revenue for the quarter fell 18.7% to $790.2 million as sales of video game hardware and software continued to decline. But operating income rose to $160.2 million from $66.4 million a year earlier.

Gross margin expanded to 43.7% from 29.1%, helped by a shift toward higher-margin collectibles such as trading cards. Adjusted earnings before interest, taxes, depreciation and amortization rose to $174 million from $75.7 million.

GameStop raised its fiscal 2026 outlook for adjusted EBITDA to more than $650 million, up from its previous forecast of more than $600 million.

The company has been closing underperforming stores and cutting costs under Cohen. According to the company, it has gone from a net loss of $381 million in 2021 to net income of $418 million, while reducing selling, general and administrative expenses by about $800 million.

The eBay bid

GameStop's stock has also been shaped this year by Cohen's surprise attempt to acquire eBay.

In May, GameStop made an unsolicited proposal to buy the online marketplace for $125 per share in cash and stock, valuing eBay at about $55.5 billion. GameStop said it had built a roughly 5% economic stake in eBay, mostly through derivatives.

The offer drew skepticism on Wall Street because eBay was worth several times more than GameStop. In a combative appearance on CNBC's "Squawk Box," Cohen offered few details on financing.

"We are offering half cash, half stock, and we have the ability to issue stock in order to get the deal done," Cohen said at the time.

EBay's board rejected the offer about a week later. In a letter, eBay cited concerns including "the uncertainty regarding your financing proposal," as well as operational risks and the debt the deal would create.

In June, Cohen asked GameStop's board to withdraw a proposed CEO performance award so leadership could focus on the company's operations and the eBay pursuit.

In August, Bloomberg reported that Cohen was considering withdrawing the bid and instead proposing a partnership or joint venture that would let eBay use GameStop's roughly 1,600 U.S. stores, particularly in trading cards and collectibles. GameStop has not announced a final decision on the proposal.

Valuation questions

Despite the improving profits, some analysts remain cautious. GuruFocus estimates the stock is trading well above its calculated fair value, though its price-to-earnings ratio is lower than its historical median.

MarketBeat lists a consensus "hold" rating, based on limited analyst coverage. Few Wall Street firms actively cover GameStop.

The company had a market value of about $12.5 billion as of Friday's close.

GameStop's earnings increasingly depend on investment income and gains from its large cash pile, in addition to its retail operations. That makes results sensitive to interest rates and market conditions.

Upcoming catalyst

Investors are also watching an Oct. 30 expiration date for GameStop warrants, which gives holders the right to buy shares at a set price. The expiration could affect trading activity in the coming weeks.

GameStop's stock remains among the most volatile on the market. Over the past year, it has moved more than 5% in a single session on a dozen occasions, including a 12.2% drop on Aug. 3.

The stock is down about 9% over the past 12 months, despite its recent rally.

For now, Cohen's continued buying appears to be giving investors a reason to stay bullish, as the CEO puts more of his own money behind his turnaround strategy.