Is GameStop Finally Becoming More Than Just a Meme Stock? Ryan Cohen's Strategic Moves Show Promise

When Ryan Cohen stepped into the CEO role at GameStop in late 2023, he inherited a company trapped in the identity crisis that defines many meme stocks. These are securities that experience sudden, dramatic price surges driven more by social media momentum than fundamental business value. Yet Cohen’s recent actions suggest he’s determined to transform GameStop into something fundamentally different—a diversified digital commerce platform with real underlying assets.

From Meme Stock Darling to Strategic Buyer: Cohen’s $10.5 Million Vote of Confidence

Recent filings with the Securities and Exchange Commission reveal that Cohen has been putting serious money where his mouth is. The Chewy founder purchased 500,000 GameStop shares at approximately $21.12 per share, representing a total investment of over $10.5 million. This move has raised his ownership stake to just over 9% of outstanding shares.

This isn’t casual trading—it’s the kind of insider accumulation that typically signals genuine confidence in a company’s future. Unlike the retail investors who once fueled meme stock mania through social media coordination, Cohen’s position represents institutional-level conviction. His willingness to deploy capital at these levels during GameStop’s operational transformation deserves closer examination.

The Business Transformation: Beyond the Dying Hardware Model

Since taking the helm, Cohen has pursued an aggressive portfolio diversification strategy. The company has ventured into collectibles, expanded its treasury by acquiring Bitcoin holdings, and dramatically reduced its physical store footprint. These aren’t random pivots—they represent a calculated effort to distance GameStop from its identity as a struggling brick-and-mortar video game retailer.

The 2025 financial results provide concrete evidence of where this strategy is working and where significant challenges remain:

Hardware segment: Revenue declined roughly 5% through the first ten months of the year. While this represents a stabilization compared to historical trends, it shows the core legacy business hasn’t yet found sustainable footing.

Software business: This division remains problematic, with revenue dropping 27% year-over-year. Unless this trajectory reverses, software will continue to represent a drag on overall performance.

Collectibles expansion: This is where the transformation shows genuine momentum. Revenue surged 55% in the same period, driven by sales of apparel, trading cards, toys, and gaming merchandise. This segment demonstrates that GameStop can build revenue in categories outside traditional video game retail.

The Financial Picture: Meme Stock Evolution or Mirage?

The broader financial metrics paint an encouraging but incomplete picture. GameStop has meaningfully improved its cash position, generating $0.67 in diluted earnings per share through the first ten months of 2025—a substantial improvement compared to the prior year’s results. The company has also demonstrated real progress on operational efficiency, with reduced expense burdens from its store closure strategy.

At face value, these improvements suggest GameStop is executing a genuine turnaround. The challenge lies in assessing valuation in context of execution risk. With a market capitalization near $9.7 billion, the stock trades at approximately 2.3 times annual revenue and roughly 22 times forward earnings estimates.

Wall Street’s coverage tells its own story: only one analyst actively tracks GameStop, a remarkably thin consensus for a company with this market cap. That single analyst projects 2026 earnings approaching $1 per share and total revenue reaching $4.16 billion—both representing growth compared to 2025 levels.

The valuation question becomes critical here. For a company still attempting to stabilize its largest business segment and whose future business model remains in active experimentation, a 22x forward earnings multiple appears demanding. GameStop can likely continue trimming costs and may sustain near-term earnings growth, but the stock’s current pricing leaves limited room for stumbles in execution.

The Investment Question: Why Caution Remains Justified

Cohen’s substantial share purchases and strategic repositioning have undeniably improved GameStop’s fundamentals compared to 2023. The collectibles division shows genuine promise, financial metrics are trending in the right direction, and leadership appears committed to substantive change rather than financial engineering.

Yet these improvements alone don’t justify aggressive valuations for a meme stock in transformation. The company has stabilized—not yet proven it can return to sustainable revenue growth. The earnings multiple reflects optimistic expectations about successful business model transition. While Cohen’s insider buying demonstrates conviction, it doesn’t eliminate the core question: can GameStop actually execute on becoming a legitimate diversified commerce company?

Until that question receives a clearer answer through multiple quarters of consistent execution, prudent investors would be wise to remain cautious despite the company’s encouraging progress.