Chewy founder Ryan Cohen has gained a cult following in the meme stock community for his efforts to save video game retailer GameStop. GameStop has been a frequent target of short sellers, and its stock price has skyrocketed, contrary to smart money expectations. Try not to go bankrupt. Yet, aside from the occasional insensitive social media post, Cohen remains one of the least-known figures in corporate America.
That may be changing. On the Money has learned that GameStop officials are looking for a spokesperson. His main job will be to raise Mr. Cohen's profile in the media and perhaps sell GameStop's growth story, which has been on the decline lately.
The frenzy surrounding the trading of GameStop (listed under the symbol GME) was made famous by the movie “Dumb Money,” starring Paul Dano and Keith Gill, who played the meme icon, the so-called “Rolling Kitty.” you may remember. A mid-level financial services executive started raising his stock price on social media during the coronavirus lockdown.
In a somewhat fictionalized account of the meme stock phenomenon, high-interest hedge fund traders who had been “shorting” the company, betting it would collapse, turned to Gill and his army of small investors. The company was exposed and invested funds. It was all an effort to save the company.
Short sellers at major hedge funds suffered huge losses as the stock soared to $80 in early 2021 from trading as low as 95 cents just a few months ago. In fact, one has closed.
The meme craze saved the company and Mr. Cohen's investment. He had joined Equities since 2020. He then began rising through the ranks, eventually becoming the CEO of GameStop. The company's outlook remains fairly lackluster. GME sells video games in malls, but people prefer to buy games online.
But Mr. Cohen has used meme mania to dilute shareholders. GME currently sits on nearly $5 billion in cash, even though its stock price is down 60% from its January 2021 high.
For those who don't know him, Cohen is a bit of an oddity in the CEO field. His net worth is estimated to be around $4 billion, largely from the sale of his e-commerce pet supply company Chewy to PetSmart in 2017. But I don't remember him ever appearing on financial TV. It recognized his status as the leader of the meme cult and allowed him to interact with shareholders.
But relying on meme mania has its limits, many analysts have told me, and perhaps Cohen is starting to agree. One potential candidate for the GME PR job told On The Money that the job would primarily involve getting Cohen on a podcast to raise his profile and possibly the company's profile.
“They have said they don't want to do a traditional financial show yet, but want to focus on a podcast,” the source said.
One reason is that large investors probably don't see long-term value in companies that sell video games in malls, so there may be more individual stock buyers there.
Spokespeople for GME and Cohen did not respond to calls and emails seeking comment.
