The 800% surge in GameStop shares put Chewy's founder and former CEO into the billionaires category in record time.
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This article has been translated from our Spanish edition using AI technologies. Errors can occur due to this process.
This week, GameStop stocks drove Wall Street crazy due to a massive buyout by Reddit users. The stunt skyrocketed the video game company's stocks, causing heavy losses for some and millionaire profits for others.
Such is the case of businessman Ryan Cohen, founder and former CEO of Chewy, a pet supplies e-commerce business. The 35-year-old investor became a billionaire thanks to the stock market games and the initiative of the “Redditors”. His net worth rose to an estimated $ 1.7 billion (approximately 35 billion Mexican pesos).
GameStop's share price skyrocketed due to the collective action of Reddit users on a forum called "Wall Street Bets" which has more than 4.5 million followers. There they organized themselves to buy stocks that hedge funds would bet against. The purchases caused GameStop stock to drop from $ 17 on Jan. 1 to $ 469 on Jan. 28.
At the end of last year, Ryan Cohen invested approximately $ 76 million in purchasing more than 9 million GameStop shares. His intent was to help reorganize the Texas-based company, which was in a losing streak.
– Ryan Cohen (@ryancohen) December 9, 2020
"Unfortunately, it is clear that GameStop does not currently have the mindset, resources and plan to become a dominant player in the industry," Cohen said in a public letter to the board of directors of the video game businesses.
"GameStop needs to evolve into a technology company that excites gamers and delivers exceptional digital experiences. It doesn't have to remain a video game retailer over-prioritizing its physical presence and hitting the online ecosystem," added the former CEO of Chewy.
GameStop stocks are up more than 800% since Cohen. Now the value of his stake is $ 825 million.
Add to this the 3.4 billion he received in 2017 when he sold his Chewy company to PetSmart. Forbes estimates the businessman is worth nearly $ 1 billion. The investor landed three seats on GameStop's board of directors in early January, one for himself and two for former Chewy executives.
What can Ryan Cohen expect?
It's impossible to predict how long Cohen will stay on the billionaire list as GameStop stocks are more volatile than ever.
"Gamestop shorts and longs are in a knockout battle on the stock exchange and on social media platforms," Ihor Dusaniwsky, managing director of S3 Partners, told Forbes on Tuesday.
The specialist found that short sellers betting against stocks have fallen by about $ 5 billion this year.
"Both parties firmly believe, but in the end one party will be the final winner, and in the later rounds of this fight the big shareholders are way ahead," said Dusanivsky.