GameStop’s Next Chapter: Profits, $6B Balance Sheet and Bitcoin Treasury Strategy—Analysis

• Ryan Cohen is leading one of the most disciplined turnarounds in retail. Cohen brought founder-level intensity to GameStop, cutting executive pay from $55M to $2M, refusing all compensation himself and insisting on real skin in the game.
• GameStop’s decision to allocate capital toward Bitcoin (BTC) introduces a high-volatility growth lever while preserving its core business trajectory. If executed well, it could become a long-term driver of shareholder value.
• While there is no definitive proof of concealed short exposure, the structural red flags suggest that, if such exposure exists, the potential for a future squeeze remains significant.

GameStop remains one of the most controversial stocks in financial market history—possibly, the most controversial.

At one point, it was a retail giant—every gamer knew the name. Crowds lined up before sunrise, waiting for the newest release they’d pre-ordered months earlier.

The smell of shrink-wrapped cases, the jittery excitement on the way home, the booklets nobody read but everyone flipped through, the soft click of the disc sliding into the console—every detail mattered.

That’s why GameStop wasn’t just a store. For many, it was a cornerstone of growing up.

But the industry shifted. By 2014-2015, digital storefronts surged, as gamers embraced downloads, with Sony, Microsoft, Nintendo and Steam fully committed. Yet GameStop didn’t: It remained anchored to physical retail, betting big on a shrinking market.

The cracks appeared quickly. Management lost focus, chasing one distraction after another. Revenue stagnated, then declined. Net income turned negative, debt continued to rise, and the board cut the dividend. Their attempted diversification through acquisitions backfired—instead of strengthening the company, they merely diluted it.

By all rights, it should have failed: A brick-and-mortar relic stuck in the physical world while the world migrated online. Yet, the collapse never arrived. Instead, the market would soon experience one of its most bizarre and explosive turnarounds.

First, it became a meme, then a movement, and more recently, a profitable business.

In this issue of CCN Reports, we conduct a thorough financial review of GameStop Corp., analyzing revenue trends, margins, debt levels and cash flow performance. We evaluate the company’s capital allocation strategy, business model and leadership under Ryan Cohen. The report further explores strategic considerations surrounding the company’s Bitcoin (BTC) interests, while assessing key risks and presenting valuation scenarios based on current execution.

The Man Behind GameStop: What You Should Know About Ryan Cohen

Early Life and Entrepreneurial Beginnings

Ryan Cohen was born in 1986 in Montreal, Canada. He grew up in a middle-class Jewish household and was heavily influenced by his father, Ted Cohen, who owned—and rescued—a glassware import business , originally started by Ryan’s grandfather.

Ted Cohen transformed the company through a relentless work ethic, arriving daily at 6 a.m., unloading warehouse pallets, then returning to office duties, soaked in sweat while managing hundreds of products.

Ted became Ryan’s primary mentor and closest advisor. He taught him discipline, long-term thinking and the importance of putting customers first. Outside of work, Ted approached money with the same level of care: He invested every spare dollar into stocks and kept a close eye on the market.

When Ryan turned 12, his father began teaching him how to invest. The early exposure shaped Ryan’s mindset and got him investing before he even finished high school.

As Cohen said, “Everything I know—from empathy to the principles of making money—I learned by following in the footsteps of my father.”

Cohen demonstrated early entrepreneurial promise, launching his first affiliate marketing site at just 15. After briefly attending the university, he left with his father’s blessing to pursue entrepreneurship full-time. By his early twenties, he had already accumulated significant startup experience.

In 2011, at the age of 25, Cohen co-founded Chewy (originally Mr. Chewy), inspired by a frustrating experience buying pet food online for his poodle, Tylee. He believed that pet parents deserved Amazon-level logistics with a level of service and emotional care no one else in the industry was providing, at the time.

Cohen built Chewy on three pillars: Customer retention, logistics efficiency and obsessive attention to detail. He often cited Amazon as inspiration, but added a personal touch—sending handwritten notes, pet portraits and sympathy flowers.

His focus on long-term customer loyalty became part of Chewy’s DNA. In 2017, PetSmart acquired Chewy for $3.35 billion , the largest e-commerce acquisition in history at the time.

Cohen remained the CEO post-acquisition, running Chewy as an independent business. Under his leadership, Chewy hit $3.5 billion in revenue in 2018 . That same year, Cohen stepped down to focus on his family and pursue personal priorities.

Leadership experience becomes paramount when evaluating turnaround situations like GameStop’s. There’s always a chance for luck, timing or some unexpected catalyst to shift the narrative, but in the long run, experience matters. And the Chewy saga reveals what kind of entrepreneur Ryan Cohen is.

Cohen built the company in Florida, far from the venture capital hubs of New York and Silicon Valley. He was pitching a low-margin, logistics-heavy business to investors who wanted software and scale rather than 30-pound bags of dog food in the mail. As a result, he faced more than a hundred rejections before anyone took him seriously.

But that experience became his edge.

Chewy taught him to operate under pressure—with limited cash, tight margins and no room for waste. He mastered stretching every dollar, structuring negative working capital and winning customer loyalty through obsessive attention to the small details that quietly shaped the customer’s entire experience and kept them coming back.

By the time Chewy reached $3.5 billion in revenue, Cohen had already weathered battles most public company executives had never encountered. There was no playbook—he wrote one himself.

This was the Ryan Cohen who arrived at GameStop: A founder who had already been through the hard part and was still hungry for more. As he told Joe Fonicello from GMEdd , “I like tough things. I don’t like to make my life easy for whatever reason.”

From Chewy to GameStop: Cohen’s Second Act

After Chewy, Cohen took a step back. He said:

“[…] like with Chewy, and I guess this is just my work ethic and how I am—if I’m CEO—I’ll basically work myself to death. I can’t control myself. I’m an extremist.”

Cohen soon shifted to full-time investing. Rather than diversifying, he followed a high-conviction, concentrated strategy, and put the bulk of his capital into Apple and Wells Fargo , viewing both as undervalued businesses with durable competitive advantages.

His philosophy echoed Warren Buffett’s approach: Invest only in what you truly understand, then hold indefinitely. The bet paid off. Apple, in particular, delivered substantial returns as the stock nearly quintupled in the years that followed.

Cohen also admired Carl Icahn’s activist approach: Buy into broken companies, confront poor leadership and fix what others gave up on. Icahn made a career out of challenging boards and forcing change, a reputation that resonated with Cohen. That same mindset would eventually draw him to GameStop.

In 2020, Cohen started quietly accumulating shares of GameStop through his firm, RC Ventures. By December, he had built a 12.9% stake, making him the largest individual shareholder. At the time, GameStop was widely seen as a dying mall-based video game retailer. Cohen recognized untapped potential: An iconic brand, a strong customer base and an opportunity to rewrite his e-commerce success story.

In his now-legendary letter to GameStop’s board, Cohen demanded nothing short of a complete strategic transformation.

His message was uncompromising: He criticized the company’s obsession with brick-and-mortar retail, its failure to embrace digital and what he viewed as backward-looking leadership. He urged GameStop to cut real estate, hire tech talent and build a world-class e-commerce platform capable of competing in the modern gaming economy.

After Cohen’s public letter dropped in November 2020, the board found itself concerned. With RC Ventures now the largest individual shareholder and Cohen’s influence growing, his critique hit its mark. It resonated. Investors took notice. So did the media. And GameStop’s stagnant stock began showing signs of life.

Behind the scenes, GameStop’s leadership tried to contain the situation. However, with Cohen holding more than 1/10th of the company, they couldn’t just ignore him. So in January 2021, they cut a deal : Cohen and two of his allies—Chewy veterans Alan Attal and Jim Grube—would join the board in exchange for capping his stake at 19.9% and standing down from a potential proxy battle.

Reflecting on that period, Cohen said:

“When I decided to join the board, I made a long-term personal commitment to be at the company for an extended period of time.”

By June 2021—just five months after joining—Cohen was appointed Chairman of the Board. Soon after, several long-tenured directors departed.

“We changed the composition of the board. We got rid of the entire board. We got rid of all the professional directors. We changed up the entire management team,” Cohen told Joe Fonicello.

In June 2022, CEO Matt Furlong was abruptly dismissed. While official reasons weren’t disclosed, the message was clear: Cohen wasn’t satisfied with the pace of execution. Just months later, the board elevated Cohen to dual roles , both President and CEO.

Cohen likely never wanted the CEO role, at least not initially. He’d been candid about Chewy’s toll: the job “almost killed” him. He had no desire to put himself through that again. But as GameStop’s transformation stalled and leadership turnover persisted, he might have concluded there was no alternative.

Cohen’s approach to responsibility set him apart. He’d been outspoken about his disdain for corporate directors who played with house money. “People behave differently when they’re risking their own capital,” he argued, repeatedly calling out professional board members and executives who make millions in risk-free compensation and stock options while shareholders hold the bag.

Cohen structured his involvement with GameStop to reflect the opposite mindset. He accepts no salary, no stock-based compensation, no bonuses. His entire stake consists of shares purchased outright—at market prices—including his initial 2020 investment and subsequent buys in 2023 and 2025 . This sends a rare signal in executive leadership: If the company succeeds, he wins with everyone else; if it fails, he loses alongside them.

GameStop’s Financial Health

The Fall of Physical Game Sales and What It Means for GameStop

The gaming industry has undergone a structural transformation over the past 15 years, leaving GameStop stranded on the wrong side of history. Between 2010 and 2025, physical game sales plummeted from 69% to just 9.22% of global market share, while digital sales surged from 31% to 90.78%.

For decades, GameStop’s core business was physical game sales, both new and pre-owned. In 2010, this segment represented 68% of total net sales. In 2015, it dropped to 56.4%, then 38.9% in 2020, before bottoming at just 26.3% in 2025.

The collapse was not just a matter of consumer taste but also a matter of structural erosion, as the entire industry changed at a systemic level. It forced GameStop to abandon its decades-long reliance on a single revenue pillar; the company’s entire economic foundation required reinvention.

Storage got cheaper, internet speeds got faster and device capacity expanded exponentially. Consumers found it simpler to purchase games digitally—downloading them in the background while continuing their day—than to visit physical stores, where trips often involved 30-minute drives and uncertain inventory availability.

The economics changed for developers and publishers, too. Digital distribution cut out intermediaries. They no longer had to spend money on discs, packaging, printing, shipping, warehousing and retail margins. For small indie studios, it became the only viable path. For large publishers, it meant higher profit per copy sold.

And most of all, the infrastructure reached a tipping point. Major platforms, like Xbox Live (Microsoft Store), PlayStation Store, Steam and Epic Games Store, made digital the default. With online storefronts integrated directly into consoles, gamers gained seamless access to automatic updates and instant downloadable content.

Although GameStop no longer reports revenue by new and used games separately, earlier data remains available. From 2010 to 2016, new game sales made up about 37% of total revenue, while pre-owned (used) games contributed about 26% on average.

Together, they represented two-thirds of GameStop’s business, and more importantly, its profit engine. Gross margins ranged from 21% to 24% for new games and from 43% to 48% for used titles.

Used games were GameStop’s golden goose. Buying low, reselling high and controlling the entire ecosystem created a margin profile that couldn’t be matched by selling new boxed titles. But as digital downloads became the norm, GameStop’s competitive moat evaporated.

Even secondhand buyers—once core to GameStop’s business—found little reason to return. Why purchase a scratched disc for $22.99 when digital sales offered the same title for $9.99?

But it wasn’t just about the price. The magic had faded, too: While recent years have produced undeniable masterpieces worthy of all-time lists, the industry’s golden age of consistent brilliance seems to have passed. The industry now favors length and volume over emotional resonance.

Where players once cherished tightly crafted 8-to-15-hour experiences that lingered for years, many modern titles demand 50 to 100+ hours in open worlds that blur together.

Player expectations have changed. Past generations witnessed seismic shifts: 2D to 3D, standard definition to HD, static AI to dynamic, open worlds. We’ve achieved photorealism, cinematic narratives, open-world crafting and real-time ray tracing. The result? Fewer games achieve that lasting cultural imprint they once did.

There are a thousand more reasons why this shift happened—streaming culture, content overload, changes in gamer demographics. But they all led to one inescapable reality: Physical game sales were collapsing at an exponential rate.

GameStop, having built its empire on that experience, had no choice but to evolve or be erased.

Why GameStop Closed Over Half of Its Stores

One way to evolve was to close stores that no longer made financial sense. In 2010, GameStop operated 6,670 stores worldwide:

• 4,536 stores in the United States
• 345 in Canada
• 1,384 across Europe
• 405 in Australia

This expansive footprint made sense when physical game sales, midnight launches, and in-store traffic dominated the industry. However, as the structural shift toward digital distribution accelerated throughout the 2010s, the rationale for such a large physical presence weakened.

GameStop’s leadership eventually recognized this trend, albeit slowly, and began closing stores. By the end of 2020, the global store count had declined by 28%.

Between 2010 and 2020, GameStop’s previous management closed 1,854 stores. After Ryan Cohen joined the board in January 2021, the pace intensified dramatically: From 2021 through early 2025, GameStop shuttered an additional 1,613 locations, reducing the global footprint by 33% to just 3,203 stores.

While earlier closures were reactive and slow, the post-2020 ones were part of a deliberate restructuring strategy focused on operational efficiency, profitability and capital discipline. Rather than viewing store closures as a symptom of failure, Cohen’s leadership treated them as a strategic necessity to rightsize the business for a predominantly digital market.

Revenue mirrored the store contraction. In 2010, GameStop posted $9.47 billion in total revenue. By 2020, this had fallen to $5.09 billion, marking a 46% decrease.

Under Cohen’s far more aggressive and intentional store rationalization effort, revenue declined further to $3.8 billion in early 2025, representing a 60% cumulative decline from 2010 and a 25% drop from the 2020 levels.

On a per-store basis, revenue fell from $1.42 million in 2010 to $1.06 million in 2020 and later, improved slightly to $1.19 million by 2024.

However, revenue per store tells only part of the story. A complete assessment of operational health requires examining gross profit trends and gross margin expansion, both of which provide a much better indication of operational efficiency and cash generation potential.

In 2010, GameStop generated $2.54 billion in gross profit, equivalent to approximately $380,000 per store. By 2020, gross profit had effectively halved, falling to $1.26 billion, or approximately $262,000 per store.

While GameStop’s total gross profit remained stable at approximately $1.23 billion in 2024, compared to 2020, the reduced store count pushed gross profit per store to approximately $385,000, surpassing both 2020’s performance and six of the previous 15 fiscal years (2010, 2019 to 2023).

The per-store profitability gains coincided with significant gross margin expansion. In 2010, GameStop’s gross margin stood at 26.79%, before eroding to 24.75% by 2020. Cohen’s restructuring drove a recovery to 32.25% by early 2025, representing a 546 basis-point improvement over 2010 and a 750 basis-point surge from 2020 levels.

On a per-store basis, this translates into a substantial improvement in operating efficiency. In 2010, each store contributed approximately 0.00402% to the gross margin. By 2020, that figure improved to approximately 0.00514%. Under Cohen, the gross margin per store nearly doubled, reaching 0.01%.

The importance of this change cannot be overstated. Despite closing 52% of its global stores and enduring a 60% decline in total revenue since 2010, GameStop materially strengthened the profitability of its operations. The company retained more gross profit per revenue dollar while operating a smaller, more efficient retail network.

It is important to note that many comparative figures reference 2020, a year heavily impacted by the COVID-19 pandemic, when nearly all companies faced revenue disruptions and operational challenges.

However, even when compared to 2019 pre-pandemic levels, the broader story remains unchanged: GameStop’s core business performance has demonstrably improved under Ryan Cohen’s leadership.

GameStop’s Revenue Diversification

Another way to evolve was to diversify the company’s revenue streams.

A major strategic shift was the collectibles and trading card expansion. Since 2017—when GameStop began reporting three main revenue categories (hardware, software and collectibles)—only collectibles have delivered consistent growth.

In 2017, collectibles generated $638.7 million in sales. By 2024, that number had increased to $717.9 million. Meanwhile, hardware revenue fell from $3.65 billion to $2.1 billion and software revenue dropped from $4.26 billion to just $1 billion.

The percentage breakdown reveals clear trends: GameStop has grown more reliant on hardware sales, collectibles have steadily gained share and software has shrunk proportionally.

To further capitalize on the trading card boom, GameStop entered a partnership with Professional Sports Authenticator (PSA) in October 2024. PSA is the leading card grading service in the world. Under the partnership, GameStop became an authorized PSA grading submission center.

Customers can now drop off various cards—including Pokémon, sports cards and Magic: The Gathering—at select GameStop stores for professional grading. The service costs $18.99 per card plus a small shipping fee. Once graded, the cards are returned to the store for pickup. The company also encourages collectors to trade in graded cards, offering Pro members a 15% bonus on trade-ins.

This approach serves three strategic purposes: Driving more foot traffic, building a supply of high-value graded collectibles for resale and strengthening GameStop’s brand in the growing collectibles market . As customer engagement around trading cards and rare items increases, GameStop is steadily moving toward its long-term goal of reaching $1 billion in annual collectibles revenue.

The uniqueness of many items also creates a key differentiator for GameStop. Offering products that are difficult to find elsewhere helps it strengthen customer loyalty and build a competitive edge that mass retailers struggle to match.

Another pillar of GameStop’s diversification has been the overhaul of its online operations.

In 2021, under new strategic leadership, GameStop invested heavily in upgrading GameStop.com and its mobile app. The company focused on fundamental improvements, like faster loading times, better inventory tracking and smoother checkout. It also integrated stores into the online fulfillment network, transforming them into mini-distribution hubs for faster local shipping and pickups.

Beyond technical upgrades, GameStop expanded its online product categories. The website evolved from a simple game retailer to a full marketplace for gaming and geek culture. By 2023, shoppers could get computer parts, PC accessories, collectibles, toys, clothing and even gaming chairs and furniture.

At the same time, GameStop revamped its loyalty program. In 2023, the “PowerUp Rewards Pro” membership was relaunched as “GameStop Pro” with a higher annual price—$25 instead of $14.99—but substantially enhanced benefits. Pro members now receive:

• 5% off pre-owned games, consoles, and accessories
• 5% off collectibles, trading cards, toys, and apparel
• 5% off clearance and GameStop-branded merchandise
• $5 reward coupons each month
• 2% back in reward points on purchases
• Early access to product drops and special sales

The question, however, is whether expanding discounts cuts into profitability.

The $25 annual fee generates immediate cash flow. While the coupons nominally provide $60 in annual value, not all members fully redeem every reward or maximize all discounts. In fact, according to a Capital One report , only 0.85% of all coupons issued in the U.S. in 2023 were actually redeemed.

More crucially, the program incentivizes increased spending. Customers using the monthly $5 coupon typically purchase additional items to redeem it. The Capital One report confirms this effect: 38% of U.S. consumers spend more than planned when using coupons and 67% make impulse purchases because of them.

Beyond the immediate financial impact, the loyalty program strengthens customer retention by maintaining engagement within GameStop’s ecosystem. Pro members demonstrate higher purchase loyalty at GameStop locations, compared to competitors, reducing the need for costly customer acquisition efforts and helping stabilize revenue over the long term.

Improvements Across the Income Statement and Balance Sheet

All of this sets the stage for meaningful improvements in operating income, tighter control over SG&A expenses, healthier inventory management, stronger cash and equivalents, reduced debt and, ultimately, positive net income.

GameStop’s operating income had been in a sustained decline since 2015. By 2018, the figure not only dropped but turned negative. When a company’s operating losses persist, it signals deep structural problems—from an eroding revenue base to misaligned cost structures—that heighten insolvency risk over time.

Six years have passed since that inflection point, yet GameStop remains unprofitable. Still, the progress is notable: Operating losses have shrunk dramatically from their 2018 trough of -$702 million to just -$26.2 million by 2024’s close.

After operating income, SG&A (Selling, General and Administrative) expenses become the next logical focus. These represent the ongoing costs of business operations—salaries, rent, marketing, logistics—and demonstrate how effectively management controls costs against revenue.

GameStop’s SG&A expenses have followed a steady downward trajectory since 2015. In absolute terms, costs have nearly halved, falling from $2.11 billion in 2015 to $1.13 billion in 2024.

The reduction proves crucial for GameStop, protecting margins amid declining revenues. As top-line sales continue their expected decline during the company’s footprint optimization, lower fixed costs ensure more gross profit reaches the bottom line.

Just as expense control protects margins, inventory management protects cash flow. In retail, inventory is trapped cash. When stock levels outpace sales, it ties up working capital, increases carrying costs and raises the risk of heavy markdowns if products fail to sell.

Conversely, overly lean inventory risks stockouts and missed sales. As in all aspects of business, success lies in finding the right equilibrium between availability and operational efficiency.

Since 2018, GameStop has consistently reduced its inventory levels from $1.25 billion to $480.2 million by the end of 2024. At the same time, inventory turnover has declined, and GameStop’s turnover rate of 4.94 remains the lowest across its peer group.

Typically, declining inventory turnover signals sluggish sales, cash flow constraints and mounting markdown risks. But the falling turnover is largely a side effect of deliberate strategic repositioning: Store closures, inventory rationalization and a shift toward higher-margin, lower-velocity categories, such as collectibles.

GameStop has intentionally moved away from high-volume, low-margin turnover of physical games toward a leaner, more sustainable product mix. As a result, while turnover metrics have deteriorated, gross margins have expanded by 750 basis points since 2020.

On a relative basis, GameStop’s inventory-to-sales ratio of 12.56% is well aligned with peers:

• It is close to the specialty retail average (13.75%)
• It is above the general retail average (9.05%)
• And it remains broadly consistent with companies of similar scale and structure

What this tells us is that GameStop’s inventory levels are appropriately sized relative to its shrunken revenue base. There is no evidence of inventory bloat, which would show up as an outlier ratio far above industry norms.

Ultimately, net income stands as the most critical metric.

After years of heavy losses, GameStop finally returned to profitability in 2023 and 2024. From losing half a billion dollars annually just a few years prior, the company posted a $131 million net profit in 2024.

Nonetheless, the core retail business still operates at a loss. The positive net income is driven largely by returns generated on GameStop’s large cash reserves. Investment income from these reserves has become a huge tailwind for the company.

These cash reserves originated from a series of at-the-market (ATM) equity offerings, one completed in 2021 and three executed throughout 2024. With no viable alternatives, GameStop faced a binary choice:

• Either continue bleeding cash until eventual bankruptcy,
• Or dilute shareholders in the short term, raise fresh capital, use that capital as a financial pillow and buy time to execute a turnaround that could ultimately enhance long-term shareholder value.

GameStop chose the second option, and by doing so, it accumulated almost $5 billion in cash and marketable securities. At the same time, it completely eliminated all long-term debt from the balance sheet.

Short-term liabilities remain part of normal operations, but at just $665.4 million, they are a mere drop compared to GameStop’s nearly $5 billion cash reserves. This requires no complex analysis: The company’s inventory and current assets easily cover these obligations, as they should.

It’s worth mentioning that every ATM offering coincided with market euphoria—periods when GameStop’s stock price had risen dramatically within short timeframes.

The rationale is clear: During these euphoric phases, trading volumes peak, enabling large blocks of shares to be sold with minimal price impact. On the other hand, elevated share prices allow greater capital raises with fewer shares sold, reducing dilution for existing shareholders.

Executive Compensation

For over a decade, GameStop’s executive compensation practices raised serious concerns. Despite deteriorating business fundamentals since 2010, stock awards and cash bonuses for senior leadership grew consistently.

On average, executive compensation consumed about 0.25% of revenue, or roughly 3.6% relative to net income. In certain years, the disparity between shareholder returns and management rewards reached absurd levels.

In 2012, despite posting a net loss, GameStop paid out executive compensation worth nearly 13% of that loss. In 2017, while still profitable, executive pay consumed 34.7% of total earnings. From 2019 to 2020, executive pay reached 1.8% to 3.5% of the company’s total market capitalization.

Things got worse after 2021. Executive compensation, compared to net income, reached 14.5% in 2021, 13.1% in 2022 and a mind-boggling 71.8% in 2023. However, there is a reason behind it.

These excessive payouts primarily resulted from legacy contracts and severance packages for departed executives, including former CEO George Sherman, CEO Matt Furlong, COO Jenna Owens, COO Nir Patel and CFO Diana Saadeh-Jajeh, among others.

Many of these awards were tied to tenure-based stock grants, negotiated before Cohen joined the board. The surge in stock price during 2021 inflated the final value, but the bonuses had already been locked into the original agreements.

By 2023, the compensation landscape had shifted significantly. Total executive pay dropped to $4.81 million. Although it still represented 71.8% of the year’s modest net income, the number was heavily skewed by transition-related payments. Former COO Nir Patel and former CEO Mathew Furlong accounted for $3.06 million of the total.

Most remaining leadership aligned with Cohen’s philosophy:

• Mark Robinson (General Counsel and Secretary) and Dan Moore (Principal Financial and Accounting Officer) earned around $500,000 each.
• Diana Saadeh-Jajeh, who had already left the company, received about $700,000.
• Ryan Cohen maintained his $0 compensation policy—no salary, no bonus, no equity awards.

For context, Apple allocated $562.3 million in executive compensation from 2022 to 2024—just 0.18% of its net income. If the world’s most valued company, run by supply chain visionary Tim Cook and an elite team, spends less than one-fifth of a percent of earnings on its leadership, how can GameStop rationalize paying higher percentages while unprofitable?

By 2024, executive compensation reached a historic low of $2.03 million, solely covering base salaries for a streamlined leadership team and security expenses for Cohen’s position.

The direction of the board and executive team under Cohen marks a clear departure from past practices. Compensation now aligns with corporate health rather than personal gain—no longer rewarding failure or treating pay as an entitlement. Leadership must now deliver tangible results to earn their compensation, and that change is a major positive for long-term shareholders.

Cohen’s philosophy on corporate governance leaves little room for interpretation. In the same 2022 interview with Joe Fonicello, he said:

“I think we got here when we started loading up professional directors in corporate America. They started being responsible for shareholder money without risking their own. They go and hire compensation consultants, surround themselves with expensive lawyers and other consultants, and they don’t care about the money. So they go and overpay for talent. They overpay for everything because it’s not their money. Why would they give a crap?

That’s how we got here. Most of these public companies have boards full of professional directors. Ultimately, I think the solution is putting people in the boardroom who are risking their own capital. Then they’re going to act a lot more sensibly.

But that’s not the direction we seem to be heading in. We seem to be heading in the opposite direction. I think directors and officers, if they’re responsible for shareholder money, should risk their own money. They should be buying shares with their own money. And you don’t see enough of that. You see very little of it. I don’t like it. I don’t like it one bit.

Building Chewy, I was risking my own capital. I didn’t take a salary for a long time. And the salary I did take was really small. It wasn’t millions or tens of millions.

So, as an entrepreneur, I don’t understand what’s going on in corporate America. It’s a whole other world. It’s like Looney Tunes. Some kind of fantasy land or sick dream. It just doesn’t make any sense to me.

You can lose a lot of money and still make a lot of money. You can lose shareholder money and still make a lot of money. And it happens all the time.”

GameStop’s Intrinsic Value

Discounted cash flow (DCF) analysis remains one of the most reliable methods for estimating a company’s intrinsic value. This approach cuts through market noise to evaluate the firm’s ability to generate sustainable, long-term cash flow.

We applied a 10% discount rate, which reflects the balance between GameStop’s strong cash position and the risks that come with its ongoing turnaround. A lower rate would disregard remaining business challenges, while a higher rate would undervalue demonstrated progress.

To conduct the DCF, we first project GameStop’s future free cash flow through 2032. Free cash flow (FCF) is defined as cash generated from operations minus capital expenditures (CapEx).

As previously demonstrated, Cohen’s leadership has driven consistent debt reduction, CapEx discipline and gross margin expansion. These operational improvements signal a company moving decisively toward stability.

Given the ongoing turnaround, we applied three different revenue growth scenarios: 3%, 8% and 15% annually over the forecast period. In each case, we projected CapEx decreasing from $16.1 million in 2024 to $14 million in 2025 before stabilizing—a conservative approach reflecting both recent cost discipline and aggressive restructuring.

Under these conditions, the Net Present Value (NPV) results are as follows:

• 3% Growth: The estimated business value of $1,100.23 million, or approximately $2.36/share.
• 8% Growth: The estimated business value of $1,405.56 million, or approximately $3.01/share.
• 15% Growth: The estimated business value of $1,969.20 million, or approximately $4.22/share.

The analysis must also account for cash and debt positions. GameStop’s “debt-like” instruments—including long-term liabilities, current debt and lease obligations—total $410.7 million.

On the other side of the balance sheet, the company holds $4,774.9 million in cash and marketable securities. Adding the recently completed $1.48 billion senior notes offering brings the total cash balance to $6,254.9 million. After netting out debt, GameStop’s net cash position stands at around $5,844.2 million.

Although the $1.48 billion convertible senior notes are classified as debt, we view them as quasi-equity. Given GameStop’s right to settle conversions in stock and the reasonable likelihood of conversion based on the current and expected stock price trajectory, we do not expect this to result in a material cash outflow.

When incorporating cash and debt into the valuations, the fair value per share under each scenario becomes:

• 3% Growth: $14.87/share
• 8% Growth: $15.53/share
• 15% Growth: $16.74/share

However, Cohen’s proven leadership, the company’s strong retail investor following and enhanced brand strength post-2021 justify applying a valuation premium.

Applying a 20% premium to account for these qualitative factors results in upside targets:

• 3% Growth: $17.85/share
• 8% Growth: $18.63/share
• 15% Growth: $20.08/share

Notably, all adjusted valuations converge around 18% to 21% per share, precisely GameStop’s established support range since early 2022. The fact that fundamental value and technical support both point to almost the same range only strengthens the case for this area as a rational entry point.

GameStop vs. Competitors

While valuation models estimate intrinsic value, they require market context. Markets are comparative by nature. To understand where GameStop stands, we need to see how it stacks up against Amazon, Best Buy, Walmart and Target, but also against the broader specialty and general retail sectors.

Net Margin (TTM)

GameStop achieved consecutive annual profitability in 2023 and 2024, a notable reversal from previous years’ hundred-million-dollar losses. Its most recent net margin reached 3.43%.

That number still falls well short of Amazon’s 9.3% margin, which sits in a league of its own. But compared to direct retail peers, GameStop is already holding its ground. Walmart posts a 2.23% net margin, Best Buy – 2.85% and Target comes close at 3.84%.

The crucial benchmark, however, remains industry average. While specialty retail companies collectively operate at a 1.49% net margin, general retail performs better at 4.6%—a threshold GameStop is already approaching.

This analysis reveals that GameStop’s net margin aligns appropriately with its retail positioning. Amazon-level performance remains unrealistic, but a sustainable 5% target represents both an achievable goal and meaningful improvement potential.

Operating Margin

GameStop’s operating margin remains negative at -0.46%—seemingly disappointing until contextualized. From its 2022 historic low (-5.96%), the company has engineered a 550-basis-point improvement in just two years through aggressive expense reduction.

A negative operating margin means the company is not yet producing income from its core operations after accounting for overhead. While it is now close to breakeven, it has not yet crossed the threshold into sustainable operating profitability.

For comparison, other retail peers are comfortably positive. Best Buy, Walmart and Target each operate with margins in the 4% to 5% range. Specialty retail averages 5.3% and general retail sits at 5.9%. Amazon, once again, sits well above the field, with a margin of 10.87%.

GameStop’s margin remains the weakest in the group. If the recent cost discipline continues, breakeven could turn into consistent profitability.

Price-to-Book Ratio (P/B)

The price-to-book (P/B) ratio measures a company’s market valuation relative to its book value. In simple terms, it tells us how much investors are willing to pay for each dollar of net assets.

GameStop stands out in this category, with a P/B ratio of just 2.46, the lowest among its peer group. This is primarily because of its unusually strong balance sheet. As mentioned earlier, GameStop holds around $5 billion in cash and marketable securities, supported by multiple at-the-market (ATM) offerings that helped raise a substantial amount of capital.

Only Target comes remotely close, with a P/B ratio of 2.86. The remaining peers trade significantly higher. Amazon and Walmart both exceed 8, while specialty retail, including Best Buy, ranges between 5 and 6. General retail as a whole skews toward the upper end of the spectrum.

While GameStop’s low P/B ratio signals relative undervaluation and balance sheet strength, investors should still ask what the company intends to do with all that cash. A cheap multiple is not enough. What matters next is execution.

Price-to-Earnings Ratio (P/E)

GameStop’s current price-to-earnings ratio stands above 100, surpassing both direct competitors and the combined specialty and general retail industry average.

However, after nearly a decade of losses, GameStop returned to profitability in 2023-2024, rebounding from a $700 million deficit to $131 million in net income. Should cost-cutting and margin expansion continue, driving net income to $400 to $450 million at a $28 to $30 share price, its P/E ratio would align with Best Buy, Target and industry norms.

This is the nature of turnaround stories. They do not show up on a value screener with textbook metrics, at least not right away. Buying into a business during this phase is not about paying for what it is today but for what it can become if the recovery continues.

Price-to-Sales Ratio (P/S)

The price-to-sales ratio indicates how much the market is willing to pay for each dollar a company brings in. GameStop’s current P/S ratio stands at 3.17, closely aligning with Amazon’s 3.70, but far above its direct retail peers. Best Buy trades at just 0.33, Target at 0.40 and Walmart at 1.13. On a broader scale, the specialty retail sector averages 1.07, while general retail maintains a P/S ratio of 2.00.

The explanation is straightforward: GameStop has spent the past few years shuttering unprofitable stores and reducing its physical footprint. Naturally, that means lower overall revenue. When revenue drops but the stock price remains steady, the P/S ratio rises. From a surface-level view, this can create the impression that the company is overvalued.

But the market is not paying a premium for the revenue it sees today. Its pricing is in its future potential.

Return on Equity (ROE)

Return on Equity measures how effectively a company uses shareholders’ equity to generate profit.

ROE = Net Income / Shareholders’ Equity

GameStop’s return on equity remains below 5%, which is significantly lower than that of its retail competitors due to a unique capital structure and cautious capital allocation. Most retailers operate with a mix of debt and equity, using leverage to amplify returns on shareholder capital.

GameStop, on the other hand, carries no long-term debt. While this improves financial safety, it removes the benefits of leverage that enhance ROE. With equity forming the entire base of its capital structure, GameStop should generate strong net income from operations alone to lift its ROE—something it has not yet achieved.

The company also holds an unusually large cash position relative to its revenue, which is nearly $5 billion in cash and equivalents. The cash earns very modest returns, primarily through bank deposits and money market funds.

Unlike competitors who deploy capital into inventory, store upgrades or higher-yielding investments, GameStop has chosen a conservative strategy. As a result, while the cash inflates the equity base, it does not contribute meaningfully to net income, dragging down the return ratio.

Profitability remains another limiting factor. Though the company has made progress in cost-cutting and margin expansion, its bottom line remains thin. Net income has not grown enough to offset the weight of a large equity base. Until the company either improves earnings or puts its capital to more productive use, ROE will remain low.

Return on Invested Capital (ROIC)

Return on Invested Capital measures how efficiently a company generates operating profit from the capital it controls, including both equity and debt. It reflects the return a business earns on the money it uses to run its operations.

ROIC = Net Operating Profit After Tax / Invested Capital

GameStop’s ROIC remains below 5%, far below the levels posted by other large retailers. Since 2021, the company has recorded negative operating income, which leaves little to no return for the capital it deploys.

So, the business is not yet producing strong returns from its core activities. Yes, the company remains financially stable and has ample liquidity, but it should improve its operating performance to justify the capital it has tied up in its business.

PEG Ratio

The Price/Earnings-to-Growth (PEG) ratio shows how a company’s valuation compares to its expected earnings growth. It helps investors understand whether a stock is overvalued or undervalued relative to its growth rate.

PEG = Price-to-Earnings (P/E) Ratio ÷ Earnings Growth Rate

GameStop’s PEG ratio is exceptionally low at 0.09, compared to much higher ratios for its retail peers. In other words, it means that the company is undervalued relative to its expected growth. In this case, the market is assigning a very low multiple to GameStop’s earnings potential, while analysts expect earnings growth to accelerate in the future. If GameStop meets or exceeds earnings expectations, its PEG will look like a bargain in hindsight.

How GameStop Stacks Up

GameStop’s recovery is still a work in progress. Across most traditional financial metrics, the company does not yet stand toe-to-toe with its competitors.

However, the bigger picture looks more encouraging. Net margins have returned to positive territory. Balance sheet strength is undeniable, with no debt and a massive cash position. Valuation multiples like price-to-book and PEG ratios point to meaningful undervaluation relative to growth expectations.

Unlike many peers, GameStop is not overleveraged. It is not trapped by an unsustainable capital structure. Most of the damage was done before 2021—since then, the business has moved slowly but steadily toward financial health. As Cohen described it to Joe Fonicello:

“GameStop is different. We inherited a bunch of legacy everything and underinvestment across the entire business—people, the entire technology stack. Just decades of neglect. And so, it’s hard to turn around a brick-and-mortar retailer that’s under the kind of pressure that GameStop was—and continues to be—under.”

If the operational improvements continue, if cash is deployed wisely and if earnings growth materializes as expected, GameStop’s current valuation could prove to be a rare opportunity for patient investors. Of course, there are a lot of ifs, but the trend is undeniably heading in the right direction.

The 2021 GameStop Rally Was Not Driven by a Short Squeeze

In early 2021, retail investors—especially from communities like Reddit’s r/WallStreetBets—began aggressively buying shares and short-dated call options in heavily shorted companies, like GameStop (GME), AMC Entertainment (AMC) and BlackBerry (BB). The sudden wave of buying pressure drove prices higher and triggered what became known as the “meme stock” phenomenon.

Among them, GameStop received the most attention for a few important reasons.

First, Michael Burry of Scion Asset Management publicly disclosed a position in GameStop as early as 2019. In a letter to GameStop’s board dated Aug. 19, 2019, Burry urged the company to use its excess cash to complete a $300-million share repurchase authorization.

At the time, GameStop’s stock was trading below $4 per share, near all-time lows, and Burry argued that buying back shares could retire over 80% of the company’s outstanding stock.

He pointed out that GameStop had more cash on hand than its entire market capitalization, and he criticized management for failing to capitalize on its dominant brand while competitors, like Amazon, made strategic moves.

Second, Cohen bought more than one-tenth of the company through his firm, RC Ventures. His involvement added significant weight to the turnaround narrative.

Further, Keith Gill, known online as “Roaring Kitty,” brought GameStop to the mainstream attention of retail investors. Gill turned an initial investment of about $50,000 into nearly $50 million at the peak of the rally. His detailed analysis, relentless public updates and strong belief in the company helped galvanize a massive wave of small investors to buy and hold.

And lastly, among all the meme stocks, GameStop stood out as the one that had at least some credible potential to change for the better.

The central point to make here: Many believe the rally was driven purely by a short squeeze. It was not. To understand why, we first need to look at the short interest.

Short interest measures how many shares of a company have been borrowed and sold short but not yet covered. It shows the percentage of a company’s available shares that investors are betting will go down.

Short Interest (%) = Number of Shares Sold Short / Stock Float

For most companies, short interest sits below 10%. A level exceeding 20% is generally considered unusually high.

According to the SEC’s official report , while GameStop had extremely high short interest, reaching about 122.97% of its public float in January 2021​, short covering accounted for only a small fraction of total buying activity during the price surge. The SEC noted that while some short sellers were forced to cover, the vast majority of the buying pressure came from new long positions initiated by retail investors.

In fact, the SEC specifically stated: “While the price of GameStop did eventually fall, one could ask to what extent a short squeeze lay behind its price increase dynamics […] staff observed that covering short sellers were a small fraction of overall buy volume, and GME share prices continued to be high after the direct effects of covering short positions would have waned.”​

In other words, the GameStop rally wasn’t primarily a mechanical short squeeze. It was mainly driven by positive sentiment and aggressive retail buying that overwhelmed the order book, which is a fundamental difference.

The buying was so overwhelming that some brokers, including Robinhood, restricted the ability to buy GameStop shares altogether.

The restrictions happened because clearinghouses, which guarantee trade settlement, demanded massive collateral deposits due to the extreme volatility. Brokers, like Robinhood, did not have enough cash on hand to meet those demands immediately, forcing them to limit buying to reduce their risk exposure. However, even after the DTCC waived much of the collateral requirement, brokerages still chose to disable the buy button .

GME Short Interest: Why It Still Matters

Officially, GameStop’s short interest has dropped substantially and now hovers around 6% to 7% of the public float. But many shareholders remain deeply skeptical that the reported figure is accurate.

One of the concerns is the possibility that short sellers have used complex financial instruments to conceal their true exposure. Total return swaps (TRS) are one of the most discussed methods. Through a TRS, a hedge fund can receive the economic return of shorting stock without directly shorting it itself. Instead, a prime broker carries the short, and the hedge fund enters a swap contract.

The Archegos collapse in 2021 exposed how these structures can hide enormous positions. Archegos built highly concentrated bets across multiple banks using swaps, allowing it to control billions of dollars in stocks without public disclosure. Because the prime brokers technically owned the shares and not Archegos, the fund avoided triggering public disclosure requirements, like 13F filings or ownership limits.

Each broker only saw its own exposure, not realizing that Archegos had built the same position across several institutions. Regulators and the market had no clear view of the fund’s true size or risk.

In effect, Archegos controlled billions of dollars worth of stock without ever officially owning it. The underlying short (or long) exposures remained hidden until the positions started collapsing.

Beyond swaps, deep-in-the-money (ITM) put options could mask true bearish exposure to GameStop. A deep ITM put has a strike price far above the current share price. The holder of such a contract gains almost the same economic result as shorting the stock directly. However, deep ITM puts do not require disclosure in short interest figures. A fund can build a large bearish position without creating visible short interest.

Another way to hide short positions is through failures-to-deliver (FTDs). An FTD occurs when a seller does not deliver the stock by the settlement date. In a normal market, FTDs appear occasionally without meaning much. But when FTDs rise sharply and persist over long periods, it suggests a possible shortage of real shares or hidden short selling.

GameStop recorded unusually high FTD dollar volumes during 2021. Although FTD levels have declined since then, many shareholders believe that elevated failures still hint at underlying problems.

Short exposure can also be hidden through vehicles, like the SPDR S&P Retail ETF (XRT), which holds GameStop among its components. Traders can short the entire ETF to apply indirect selling pressure on GameStop without showing up in GME’s individual short interest. Because ETF short interest is reported separately and at the aggregate level, it becomes difficult to track how much downward pressure comes from this route.

According to the SEC staff analysis:

“Shorting XRT could have served as an indirect, though imperfect, way of shorting GME. In fact, staff observed a large spike in net redemptions of nearly 6 million shares in XRT on January 27, which may be consistent with short-selling activity. This redemption activity was generated nearly entirely by ETF market-making firms.”

The structure of GameStop’s daily trading also raises questions. A large share of GME trading takes place away from public exchanges. On many days, more than half of all trading volume moves through dark pools or internalization.

Dark pools allow large trades to occur away from public view. Routing buy orders into dark pools reduces the price impact that would normally occur on lit exchanges, like the NYSE. Retail buying may end up absorbed internally, blunting the natural price reaction. Regulators reviewed dark pool practices after 2021 and did not find clear wrongdoing, but the fundamental lack of transparency continues to worry many investors.

None of these factors alone proves manipulation or concealed shorting. But taken together, they create enough anomalies to raise serious concerns. Too many irregularities surround GameStop’s trading history to dismiss them casually.

No conclusive evidence has emerged, but if hidden short exposure exists and GameStop continues strengthening its fundamentals, the risk of a short squeeze remains alive. A large-scale short-covering event could drive a meaningful upside, just as it did for Tesla and Strategy (previously, MicroStrategy) when both sentiment and fundamentals started turning around.

The true scale of hidden short interest remains uncertain. However, if aggregate exposure is anywhere close to historical highs, where over 100% of the float was effectively sold short, the result could be explosive. Historically, short squeezes under similar conditions have delivered more than 10x returns on average.

GameStop’s Bitcoin Reserve Strategy

In March 2025, GameStop announced a major update to its investment policy : Bitcoin (BTC) would now be treated as a treasury reserve asset. The move would place GameStop among a growing number of companies, such as Strategy, Metaplanet and others, who have shifted parts of their corporate treasury into Bitcoin to protect against currency debasement and inflation. However, unlike these companies, GameStop has not yet made a purchase and has only signaled its intent.

Just days later, GameStop completed a 0% convertible senior notes offering , raising $1.48 billion in net proceeds. The timing strongly implied that the new capital would serve as the primary funding source for Bitcoin acquisitions rather than dipping into the company’s existing cash reserves.

At the time of the announcement, GameStop already held approximately $5 billion in cash and marketable securities. It is unlikely that GameStop will allocate its core reserves to Bitcoin. Instead, it’s far more plausible that the company will continue to use existing cash for operational needs and use newly raised funds (through convertible offerings) to build its Bitcoin position.

The company has authorized up to one billion shares outstanding, but the current count remains at 447 million. Assuming GameStop’s share price remains relatively stable at around $30 and assuming the company continues to issue approximately 50 million shares per year through additional convertible offerings, the total proceeds could reach roughly $13.5 billion over several years.

Given the history of other companies that have pursued the same strategy, it is unlikely that GameStop’s share price will stay around $30. But even if the price moves higher, the total proceeds raised would still likely match our estimates.

Companies, like Strategy, were not able to raise this much at the beginning of their Bitcoin strategy, but the environment today is different. Liquidity is much deeper and there is a much larger pool of investors ready to back GameStop.

GameStop and Bitcoin Price Prediction

The key takeaway is that if the share price rises, GameStop can raise the same amount of capital by issuing fewer shares, reducing dilution and resulting in a higher per-share valuation, even higher than our current predictions.

To maintain simplicity and a conservative approach, we modeled three scenarios for 2032: 1 billion, 900 million and 800 million shares outstanding in the bear, base and bull cases, respectively.

We used Bitcoin price targets of $500,000, $1,000,000 and $1,500,000 for the bear, base and bull cases, respectively. These figures align with projections covered extensively in our Strategy report based on Bitcoin’s power law growth model.

If we assume that GameStop accumulates Bitcoin by purchasing at the midpoint of the Bitcoin power law channel each year, then by 2032, it would hold approximately 68,645 Bitcoins. Under these assumptions, GameStop’s Bitcoin holdings would be valued at approximately:

• Bear case: $25 billion
• Base case: $70 billion
• Bull case: $150 billion

When combining the projected value of Bitcoin holdings, the estimated intrinsic value of GameStop’s core business, the future repayment obligations from convertible debt and the diluted number of shares, we arrive at the following fair value targets:

• Bear case: $21
• Base case: $74
• Bull case: $185

However, it is important to consider that most companies adopting a Bitcoin reserve strategy tend to trade at a premium to their net asset value (NAV). If we assume a 50% NAV premium and a 100% NAV premium, the projected share prices for GameStop under different scenarios would range between approximately $34 and $372.

Conclusion

GameStop’s story is often misunderstood because it does not fit into any traditional corporate blueprint. It is neither a clean growth story nor a textbook turnaround, yet the company has made undeniable progress.

Under Ryan Cohen’s leadership, GameStop shed the legacy of poor management, eliminated debt, cut bloated costs, rationalized its store base and rebuilt margins from the ground up. Operational performance has steadily improved, even as revenue shrank.

A company once dismissed as dead now operates from a position of financial strength, with billions in cash and no long-term debt.

At the same time, GameStop has diversified its business beyond traditional physical gaming into collectibles, PC hardware and broader geek culture retail. It has invested in logistics, modernized its e-commerce platform and rebuilt customer loyalty through its Pro membership program.

None of these changes were easy and none happened overnight. They were the result of consistent execution and a commitment to long-term strategy.

The Bitcoin reserve strategy represents another potential evolution. Whether or not Bitcoin exposure becomes a major driver of value, the fact that GameStop is willing to think asymmetrically, to make bold, strategic moves at a time when most companies are defensive, tells us something about the leadership’s mindset.

Meanwhile, questions about hidden short interest remain unresolved. No conclusive evidence has surfaced, but the unusual patterns around GameStop’s trading activity continue to raise valid concerns.

Should GameStop’s fundamentals continue strengthening, and should any hidden short exposure still exist, the risk of a future squeeze remains alive.

In short, GameStop today is a company with real assets, real strategic progress, real leadership commitment and real upside potential. It is no longer just a “meme stock” or a nostalgic relic.

While the turnaround is not yet complete, the foundations have been laid.

An asymmetric bet where the downside appears limited by balance sheet strength and the upside could be shaped by multiple independent catalysts converging at once.

CCN Reports is a regular series that delves into the details to provide in-depth analysis of cryptocurrencies and the companies associated with them. We aim to engage a global audience interested in what’s what, who’s who and perhaps even why’s that.