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  • Writer's pictureIshfaaq Peerally

Ryan Cohen Writes Angry Letter to GameStop Board

Last year, Michael Burry sent a letter to the board of GameStop $GME and it completely changed the narrative for the stock as the board of directors decided to buy back shares and today, we're on the brink of a short squeeze. But market reactions to these letters were different.

Earlier this year, GameStop restructured part of their debt and a few weeks back, decided to repay 60% of all the debt due in March 2021. GameStop now only has less than $100 million in debt to be repaid in March 2021 and about $200 million to be repaid in March 2023. Therefore, GameStop is entering the new console cycle financially very strong with over $700 million in cash. But this was not enough to make Ryan Cohen happy.

After Ryan Cohen sold his company Chewy to Petsmart, he invested in only two stocks, Apple and Wells Fargo. Now, he's investing in GameStop, hoping to make the business able to compete with Amazon $AMZN , something he was able to do with Chewy.

Ryan Cohen already talked to the GameStop CEO George Sherman and the board of directors about his plans but after not seeing any action from them, he decided to go public with this letter. This means that the CEO and board should be scared about their jobs.

Ryan Cohen says that the gaming industry is growing at a very fast rate and if GameStop closes more stores and goes online, they will be able to be the market leader.

If the management does the thing that Ryan Cohen said in that letter, GameStop shall be able to grow past the this console cycle. GameStop should not expect expect Microsoft $MSFT or Sony $SNE to launch an Xbox or PS5 to grow. The gaming industry itself is growing and Ryan Cohen believes that GameStop has the intangible asset necessary to capitalize on this growth.

Watch the full video on YouTube:

𝙃𝙚𝙧𝙚'𝙨 𝙢𝙮 𝙡𝙖𝙩𝙚𝙨𝙩 𝙖𝙣𝙖𝙡𝙮𝙨𝙞𝙨 𝙤𝙛 𝙂𝙖𝙢𝙚𝙎𝙩𝙤𝙥:


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