Ryan Cohen's $35 Billion GameStop Gamble: Can He Deliver the 10x Return Investors Are Betting On?

When investors think about CEO compensation tied to transformational growth, Elon Musk’s controversial $1 trillion Tesla pay package often comes to mind. But GameStop has just unveiled a remarkably similar — and equally ambitious — incentive structure for CEO Ryan Cohen, signaling that the company’s board believes he is the right leader to engineer a dramatic turnaround. The stakes are enormous: if Ryan Cohen can hit aggressive growth targets, his equity award could exceed $35 billion, making it one of the most substantial performance-based compensation packages ever granted.

The Unprecedented Incentive Plan Behind Ryan Cohen’s GameStop Role

Understanding why GameStop’s board would offer such a massive incentive requires examining the mechanics of the plan itself. Ryan Cohen isn’t guaranteed a traditional salary or standard stock grants. Instead, his compensation is entirely contingent on hitting specific financial milestones. The company plans to issue stock options allowing Cohen to purchase over 171.5 million shares at $20.66 per share — representing an upfront grant value exceeding $3.5 billion.

However, the real prize lies in the conditional payouts. For Ryan Cohen to unlock the full $35 billion award, GameStop must achieve two transformational targets: $10 billion in annual EBITDA (earnings before interest, taxes, depreciation, and amortization) and a market capitalization of $100 billion. These aren’t modest goals — they represent a fundamental reimagining of what GameStop could become.

The plan incorporates staged vesting to incentivize progressive achievement. The first tranche, representing 10% of the total award, unlocks once GameStop reaches a $20 billion market cap and generates $2 billion in EBITDA. This tiered approach means Ryan Cohen has visibility into interim milestones and financial objectives. Shareholders must approve this arrangement at a special meeting scheduled for March or April 2026, adding a final layer of validation to the proposal.

GameStop’s Operational Turnaround Under Ryan Cohen’s Leadership

Before examining whether the incentive plan makes sense, it’s crucial to assess what Ryan Cohen has actually accomplished since taking the helm in late 2023. The results reveal a CEO aggressively reshaping the company’s business model and financial trajectory.

GameStop has executed a meaningful operational transformation. The company has systematically reduced its brick-and-mortar footprint — a necessary step given the retail gaming industry’s structural headwinds — while simultaneously expanding its higher-margin collectibles business. This strategic shift is already showing results: collectibles now represent nearly 28% of total revenue through the first three quarters of 2025, a significant improvement driven by renewed customer demand.

This business mix evolution is producing measurable financial benefits. Operating cash flow, EBITDA, and earnings all improved substantially in 2025 compared to prior years. Yet challenges remain in GameStop’s core revenue drivers. The software business — which historically represented a stable source of pre-owned game sales — has experienced meaningful decline. The hardware division, GameStop’s largest segment involving video game console sales, is also contracting, though at a slower pace than software. Together, software and hardware represent over 70% of total revenue, making their continued deterioration a significant headwind even as collectibles gains offset some of that erosion.

Ryan Cohen himself has demonstrated conviction in GameStop’s direction by maintaining over 9% ownership of outstanding shares, aligning his personal financial interests with shareholder returns.

Evaluating the Valuation Risk: Can GameStop Justify the Hype?

The critical question isn’t whether Ryan Cohen is capable — his track record suggests competence — but whether GameStop’s current valuation reflects realistic expectations for achieving his lofty targets. The company currently trades at approximately 27 times its annualized 2025 earnings, a valuation multiple that demands sustained high growth and margin expansion to justify.

For context, consider what this valuation implies. Investors are pricing in the assumption that GameStop can stabilize or grow revenue in its challenged software and hardware divisions while continuing to scale collectibles. They’re also betting that Ryan Cohen’s operational improvements will continue translating into expanding profitability. The math becomes more difficult when you consider that GameStop currently generates a fraction of the $10 billion EBITDA target built into the incentive plan — through the first ten months of 2025, the company produced roughly $136 million in EBITDA.

The gap between current performance and target performance is not a minor issue. Reaching $10 billion in EBITDA would require roughly a 73x multiple on current run-rate performance, assuming no baseline growth. While dramatic transformations in business do occur, they are exceedingly rare. The original market valuation of approximately $10.3 billion in early 2026 offered a more measured entry point than valuations might support if GameStop continues its current trajectory without major strategic breakthroughs.

One wildcard factor deserves acknowledgment: GameStop will likely maintain residual “meme magic” — the retail investor enthusiasm that periodically inflates the stock price regardless of fundamental metrics. This dynamic can create erratic price movements and occasional rallies that defy traditional valuation analysis.

What Investors Should Know Before Betting on Ryan Cohen’s Vision

The fundamental investment question boils down to this: Should you allocate capital to GameStop based on Ryan Cohen’s appointment and incentive arrangement?

From a pure valuation standpoint, the answer becomes problematic. At 27 times earnings, you’re paying a premium for a company that must execute flawlessly across multiple challenging business divisions. Even with Ryan Cohen’s demonstrated capability and the powerful incentive structure encouraging him to maximize growth, the probability of achieving $100 billion market cap with $10 billion in EBITDA seems modest at best.

The broader context matters too. Professional investment research continues to identify opportunities in the equity market that appear more favorably positioned. Netflix and Nvidia, when recommended to investors years ago, eventually delivered exceptional returns. But identifying winners requires examining not just management quality but also the underlying business fundamentals and valuation frameworks.

Before committing capital to GameStop, investors should weigh whether the near-term valuation premium is justified by Ryan Cohen’s leadership and incentive alignment. The answer may hinge less on faith in management and more on your assessment of whether GameStop can genuinely achieve gaming industry stability and collectibles expansion on a scale that supports its current market pricing. In that context, a cautious stance may deserve consideration.