The $35 Billion Challenge: Can Ryan Cohen Deliver GameStop's Turnaround?

GameStop has announced a potentially transformative compensation package for CEO Ryan Cohen, mirroring the ambitious incentive structure Tesla created for Elon Musk. Under this new plan, Cohen could earn over $35 billion if he achieves extraordinary growth targets—but first, shareholders must approve the proposal at a special meeting scheduled for March or April 2026.

How Ryan Cohen’s Performance Plan Works

The compensation structure is radically different from traditional CEO pay packages. Ryan Cohen receives no guaranteed salary, cash bonuses, or time-based stock vesting. Instead, his entire compensation hinges on hitting specific financial milestones set by GameStop’s board.

The core of the plan involves stock options to purchase over 171.5 million shares at $20.66 per share—a total grant value exceeding $3.5 billion. However, Cohen only realizes this value if GameStop achieves two critical thresholds: $10 billion in EBITDA (earnings before interest, taxes, depreciation, and amortization) and a $100 billion market capitalization.

The incentive structure uses tranches to create intermediate goals. The first phase vests when GameStop reaches a $20 billion market cap and generates $2 billion in EBITDA, unlocking 10% of the award. This progressive approach incentivizes steady execution rather than a single breakthrough achievement.

The Starting Point: GameStop’s Current Position

Evaluating whether Ryan Cohen can realistically achieve these targets requires understanding where GameStop stands today. As of February 2026, the company’s financial trajectory shows mixed signals.

Through 2025, GameStop generated approximately $136 million in EBITDA—a substantial improvement from prior years but still a considerable distance from the $10 billion target. The company’s current market valuation sits significantly below pre-announcement levels, reflecting investor skepticism about the turnaround narrative.

GameStop’s business composition has shifted meaningfully. The collectibles segment, the company’s fastest-growing division, now represents nearly 28% of revenue through the first three quarters of 2025. This newer business has become a revenue driver, generating meaningful growth where traditional segments struggle.

However, two major business units are experiencing headwinds. The software division, which sells new and pre-owned video games, has faced significant decline. The hardware segment, selling gaming consoles and related equipment, is also contracting—though more slowly than software. These two divisions combined still generate over 70% of total revenue, making their stabilization critical to any meaningful turnaround.

The Positive Backdrop: Operational Improvements

Despite revenue challenges in core segments, GameStop has demonstrated operational discipline. The company has systematically reduced its brick-and-mortar footprint, lowering fixed costs and improving unit economics. This restructuring, combined with growth in higher-margin collectibles, has translated into meaningful improvements in operating cash flow and EBITDA.

Ryan Cohen’s leadership has already produced tangible results. As a substantial shareholder owning over 9% of outstanding shares, he has personal financial incentive aligned with public shareholders. His actions to date suggest a capable operator focused on execution rather than quick fixes.

The Fundamental Headwinds: Valuation and Business Model Risk

Despite these improvements, significant questions remain about the investment thesis. GameStop currently trades at approximately 27 times its annualized 2025 earnings—a premium multiple for a company trying to stabilize revenue in its two largest business segments.

The path from $136 million to $10 billion in annual EBITDA would require roughly 75x growth. While the compensation plan theoretically incentivizes this transformation, the business model fundamentals suggest this target may be aspirational rather than achievable. Video game hardware sales have secular headwinds from digital distribution and shifting consumer preferences. Pre-owned game sales face similar pressures.

GameStop will likely maintain some speculative appeal driven by what market observers call “meme magic”—the phenomenon of retail investor enthusiasm creating price volatility disconnected from fundamental values. This dynamic can generate profits for tactical traders but creates risk for long-term investors betting on business transformation.

Investment Perspective: Execution Risk Remains High

The case for GameStop depends entirely on Ryan Cohen successfully executing an extremely ambitious turnaround while navigating secular challenges in the core video game retail business. While his track record and incentive alignment are genuine positives, the valuation multiple and the magnitude of required business transformation create substantial risk.

For investors considering GameStop, the fundamental question isn’t whether Ryan Cohen is capable or motivated—both appear genuine. Rather, it’s whether the company’s underlying business model can support a $100 billion valuation, or whether such a target reflects the optimistic framing that has historically characterized GameStop’s multiple cycles. The answer will determine whether Ryan Cohen’s $35 billion opportunity becomes a reality or remains an aspirational target.