Ryan Cohen, the entrepreneur who built Chewy.com into a pet-supply giant and sold it for more than $3 billion, is now pitching GameStop Corp. on a lofty goal: becoming a true competitor to Amazon.com Inc., according to a person familiar with the matter.
The Grapevine-based video game retailer’s shares jumped as much as 28% in Tuesday trading after Bloomberg News reported Cohen’s plans late Monday. That’s the stock’s highest level since March 2019.
After acquiring a nearly 10% stake in GameStop — making him the company’s biggest individual investor — Cohen disclosed on Monday that he is holding talks with management and several board members. Cohen’s firm, RC Ventures, has expressed willingness to get more involved with the company in order “to produce the best results for all shareholders,” according to a filing.
Cohen’s vision, which isn’t yet public, is to broaden GameStop’s online selection and compete head-to-head with some of the biggest e-commerce companies, according to the person. Rather than just offering video games and a smattering of toys, clothing and accessories, GameStop’s website would sell a wide range of merchandise and ship it to customers more quickly — a key strength of Amazon.
Of course, challenging Amazon directly would be an uphill fight. Despite relentless competition from traditional retailers and startups, Amazon has only increased its share of the e-commerce industry, and that trend is expected to continue, according to EMarketer Inc.
Amazon has a market valuation of almost $1.5 trillion, compared with $570 million for GameStop.
“I have a hard time foreseeing how GameStop can morph into a credible competitor to Amazon,” said Anthony Chukumba, an analyst at Loop Capital. “There are a lot of companies with much deeper pockets than GameStop that have had a very difficult time competing against Amazon, and some are barely competing with Amazon — Walmart, for example.”
Cohen does have a track record. He co-founded Chewy and served as its chief executive officer, then sold it in 2017 to PetSmart Inc. Its product selection is one of the e-commerce site’s selling points: Chewy offers items ranging from dog pajamas to parrot popcorn to saddles for horses.
The investor wants that same kind of variety at GameStop, according to the person, who asked not to be identified because the proposals are private. He also wants the company to improve its customer service and build the infrastructure needed to offer thousands of items and services.