GameStop CEO Ryan Cohen has executed a gigantic trade, buying more than 1.1 million shares of his own company’s stock and spending more than $26.4 million in the process. He now owns more than 40 million shares of the company, according to an SEC filing. He bought the shares at around $23/share.
Since the purchase was made public in a regulatory filing on September 21, GameStop’s shares shot up, rising more than 3%.
This was just the latest massive share purchase by Cohen, as he bought 1 million shares of GameStop earlier in September, when the stock price was lower. Some of GameStop’s directors also bought up shares this month.
The share-purchase disclosures filed with the SEC do not provide any details on why Cohen or the GameStop directors bought shares. There could be many reasons, but a CEO buying back shares of their own company is often taken as a signal that management is bullish on the company’s outlook. Anthony Noto, the CEO of online banking company SoFi, bought back his own company’s stock three times so far this year as the price fell.
When companies buy back their own shares, this can lead to an immediate boost in the overall share price, as fewer shares are available on the open market.
For his part, Cohen now owns about 9% of GameStop through his various buybacks.
GameStop and Cohen have been in the news a lot lately, as Cohen has pitched an ambitious bid to buy eBay. However, more recently, Cohen has seemingly cooled off. Bloomberg reported that Cohen was weighing his options going forward, including pulling the $56 billion bid for eBay entirely or partnering with the company instead of trying to buy it outright.
Cohen came up with the idea to buy eBay while he was on the toilet. He has also discussed an idea for re-selling digital game items, but has not explained how that could actually work in practice.
GameStop’s business today is booming, though it’s no thanks to video games. The company now earns the bulk of its revenue from collectibles, and that would be obvious to anyone who has set foot in one of their stores recently.
GameStop has turned its business around through its new focus on collectibles, as well as employee layoffs and store closures. However, GameStop recently announced that it is reopening some stores
