How GameStop chairman Ryan Cohen abandoned the company's e-commerce push to refocus on its ~4.4K stores, leading to GameStop's first profit in two years
Videogame retailer, the original meme stock, hits brakes on e-commerce push to refocus on its 4,400 bricks-and-mortar locations LinkedIn: Dana Mattioli and Victor Elmann Tweets: @gunjanjs , @ritholtz , and @gavinclimie LinkedIn: Dana Mattioli : Ryan Cohen took over GameStop as chairman with plans to turn it into an ecommerce juggernaut. The plan to open up warehouses … Victor Elmann : GameStop Puts the Brakes on eCommerce to Refocus on Brick-and-Mortar. — GameStop has decided to hit the brakes on its eCommerce push to refocus on its 4,400 brick-and-mortar locations. … Tweets: Gunjan Banerji / @gunjanjs : GME is up 377% since the start of 2021, around the meme mania, compared with ~7% gain for the S&P 500 https://www.wsj.com/... Barry Ritholtz / @ritholtz : Blockbuster II ? https://www.wsj.com/... @gavinclimie : Went from losing $100Million+ just 2 years ago to: 1) $1.23B in the bank 2) $840M+ in stock 3) $320M+ free cash flow 4) EPS 0.16 (+220.00%) exp (-0.13) 5) Revenue up to $2.23B on exp $2.18B up 2.12% 6) Being profitable But yeah @WSJ we hate that 🙄🤷♂️ https://www.wsj.com/...
Context & Ripple Effects
When Ryan Cohen took over as chairman, the plan was to turn GameStop into an 'ecommerce juggernaut' — warehouses, online marketing, even an FTX partnership on e-commerce initiatives signed while quarterly net losses were widening to $108.7M. The WSJ report closes that loop: Cohen has abandoned the e-commerce push and recentered the company on its ~4,400 brick-and-mortar stores, producing the first profit in two years.
The arc matters because the turnaround was always funded by the stock, not the business: from the 2021 Redditor-led rally when revenue rose 25% but losses still ran $66.8M, through repeated leadership churn at the top.
First-order effects
- GameStop's ~4,400 stores flip from legacy liability to core asset overnight, and the warehouse-heavy e-commerce buildout Cohen championed becomes a sunk cost rather than the growth thesis.
- The company's first profit in two years hands Cohen proof of concept for the retail-first strategy just as the e-commerce bets he authorized are being written down strategically.
Second-order effects
- The pivot completes the leadership purge: CEO Matt Furlong, hired two years earlier to run the e-commerce-era turnaround, was fired and replaced by Cohen himself as executive chairman, sending GME down 15%+ — see the Furlong firing and executive-chairman appointment.
- Profitability plus recurring meme-rally interest creates a new financing model: in June 2024 GameStop converted another Keith Gill-fueled rally into ~$2.14B of cash by selling 75M shares, meaning the balance sheet no longer depends on retail operating performance alone — per the $2.14B share-sale program.
Third-order effects
- If the pattern holds, meme-stock companies converge on a hybrid structure: a shrunken but profitable physical core, run conservatively, subsidized by periodic equity issuance into retail-investor rallies — market cap decoupled from growth narrative.
- For struggling big-box retailers generally, GameStop's store-first reversal becomes the test case for whether closing the e-commerce gap matters less than defending high-margin in-store traffic — a live instance of moat recomposition.
The trend: Meme-stock companies are learning to monetize their own rallies as a permanent funding channel while retrenching to profitable physical cores, with Ryan Cohen's store-first pivot at GameStop as the template.