Watching Ryan Cohen on TV has a peculiar quality. He rarely smiles. He doesn’t soften his responses. Earlier this month, when CNBC’s anchors questioned him about his $56 billion offer for eBay, he repeatedly pointed them in the direction of a website, almost dismissively, as though the specifics were unimportant. The interview was uncomfortable, sometimes combative, and strangely illuminating. A man with an estimated net worth of $5 billion was presenting his case for a deal that would almost quadruple the size of the business he manages, and he appeared, to put it mildly, bored.
That disengagement reveals something about the current accumulation of wealth in America. Cohen, who never attended college and once claimed to have never had “a real job,” did not become wealthy through conventional means. He didn’t move up the corporate ladder. He didn’t make the extravagant salary of a CEO. He receives no financial compensation in his role as CEO of GameStop. No time-vested stock, base, or bonus. Whether the stock he owns increases and whether the wagers he makes pay off will determine the entirety of his wealth.
A generation ago, this structure would have seemed irresponsible. In the 1990s and early 2000s, executives desired security. large salaries. Golden parachutes. Cohen says he wants the opposite. He received a performance-based option package from GameStop in January, which could be worth $35 billion if the company achieves $100 billion in market capitalization and $10 billion in EBITDA. To put it mildly, those figures are ambitious. The market value of GameStop is currently less than $12 billion.
Nevertheless, investors continue to appear. Whether it’s fair or not, there’s a feeling that Cohen embodies what the larger market craves: a founder-operator who acts like an owner because he is one. In 2017, he sold Chewy to PetSmart for $3.35 billion after creating it from the ground up. During the 2021 meme-stock frenzy, when GameStop’s share price defied gravity and Reddit forums made him a sort of patron saint, he became a folk hero to retail investors. Recently, he received support from renowned investor Michael Burry, of all people.
However, the eBay bid poses more difficult queries. GameStop has about $9.4 billion in cash on hand. A non-binding letter for debt financing of about $20 billion has been made by TD Bank. That still leaves a big gap, and Cohen’s response on CNBC was essentially that the company could just issue stock to make up the difference. As expected, analysts were dubious. It was referred to as a “parade of red flags.” Last week, Paul Pressler, the chairman of EBay’s board, declared the offer to be “neither credible nor attractive.”
The success of the deal isn’t what’s interesting. It most likely won’t. What’s important is the model that Cohen represents and the insights it offers about the current American wealth creation process. Salary is no longer the source of real money. It stems from equity, leverage, and the readiness to publicly endure humiliation in order to achieve a disproportionate reward. It stems from the type of personality that won’t back down when confronted with a CNBC anchor at seven in the morning.
Seeing this play out gives me the impression that the old corporate playbook is actually dying. The mild-mannered, well-paid CEO who earns an eight-figure salary for managing a steady company is starting to fade into oblivion. He was replaced by founders who wagered on themselves, often loudly, sometimes brilliantly, and sometimes recklessly. The rules surrounding Cohen have already changed, regardless of whether his $3 billion fortune increases to $35 billion or completely collapses.
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