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GameStop (GME) shares gained after CEO Ryan Cohen bought 844,130 shares for about $22.8 million, lifting his stake to roughly 9.1% including warrants.
- Cohen bought 844,130 GameStop shares at $26.75 to $27.00 on Oct. 13, spending about $22.8 million.
- His stake reached roughly 9.1% with warrants, and he has bought about $97 million of stock since Sept. 10.
- GME rose about 3% in extended trading to near its 52-week high of $27.53.
Lead
GameStop (NYSE: GME) shares rose in after-hours trading on Tuesday after a regulatory filing showed Chief Executive Ryan Cohen bought 844,130 shares in the open market. The purchase, worth $22,774,627, took his direct holdings to 42,492,652 shares. Including 3,734,784 shares underlying warrants, he beneficially owns 46,227,436 shares, or roughly 9.1% of the company.What Did Ryan Cohen Buy?
Cohen bought 844,130 shares on Oct. 13: 67,130 at $26.75 and 777,000 at $27.00. The filing reports open-market transactions, not an award or option exercise. Cohen has not sold any shares during the buying period.
The purchase is the fifth since Sept. 10. Earlier buys were:
- 1 million shares at about $20.38.
- 1.15 million shares at roughly $22.76 to $23.02.
- 450,000 shares at $23.48.
- 700,000 shares at about $24.41.
Together with the latest trade, the purchases total about $97 million. The average price has risen with each trade.
Two GameStop directors also bought shares in the same period. One bought 10,462 shares at $24.33, and another bought 55,000 shares worth about $1.03 million.
Why Did GameStop Shares Rise?
GameStop shares rose because the filing showed more insider buying at higher prices. The stock closed Tuesday at $27.22, close to its 52-week range of $17.79 to $27.53. It gained about 3% in extended trading after the disclosure. Regular-session volume was about 12 million shares. At that price, the company's market value is about $13.75 billion.
Buying by a chief executive with a concentrated stake is read as a signal of confidence. Cohen also serves as chairman and president, so his stake carries unusual weight over strategy and the board.
What Does the Latest Quarter Show?
GameStop's second-quarter results, reported Sept. 8, showed shrinking sales and a sharp rise in profit.
- Net sales fell about 19% from a year earlier to $790.2 million, though that was above consensus of roughly $757 million.
- Net income rose 77% to $298.7 million.
- Earnings per share of $0.27 matched expectations.
The profit gain came from cost reductions, higher-margin collectibles and trading cards, and large non-operating investment gains. Those gains include the company's position of about 43.4 million shares in eBay (EBAY). Much of the earnings growth therefore reflects investment holdings, not the core retail business, where physical video game sales continue to decline.
What Comes Next for GameStop?
The next test for the shares is whether the stock holds above its 52-week high of $27.53. Cohen's pace of buying has slowed in dollar terms from the early September trades, but his average purchase price has climbed from about $20 to about $27.
Analyst consensus on the stock is neutral. The debate centers on how much of the company's value rests on its investment portfolio and balance sheet versus a retail operation that keeps losing sales. A further filing from Cohen would show whether the accumulation continues above $27.
Outlook
Cohen's stake of roughly 9.1% is the largest it has been in the current buying run, and the stock sits near a 52-week high. Falling sales, rising profit and investment gains in the eBay holding will frame the next quarterly report.
Mentioned tickers: GME, EBAY
