GameStop stock rises 5% after major deal boosts company's valuation to $100 billion

GameStop stock rose 5% on Friday after CEO Ryan Cohen confirmed the company is looking to acquire a much larger publicly traded consumer business. He called this a “very large” deal with transformative potential not only for GameStop but also for the capital markets. While he did not disclose a specific target, Cohen said it is a undervalued company with a solid platform but poor governance and significant growth potential.

According to Cohen, GameStop has enough capital resources, governance structure, and operational capacity to overhaul this business in a “brutal efficiency” direction, similar to the philosophy he applied at Chewy. The long-term goal is to bring GameStop to a valuation of $100 billion, compared to the current approximately $10.5 billion. Although investment banks remain skeptical, Cohen emphasized that this is a high-stakes gamble worth trying, especially since GameStop has improved profitability, holds over $9 billion in cash, and has reported two consecutive years of profit.