A Bloomberg report earlier this week claimed that GameStop‘s biggest individual investor, Ryan Cohen, has plans to turn the struggling retailer into an Amazon rival. Cohen, who possesses nearly 10 percent stake in GameStop, has been engaged in talks with the company’s management and board members.
Following Bloomberg’s report, GameStop’s shares surged by 28 percent. Cohen’s firm, RC Ventures, said that it plans to “produce the best results for all shareholders.” According to the publication, his goal is to prevent GameStop from meeting a fate similar to Blockbuster’s, which was put out of business by streaming services like Netflix.
Cohen reportedly intends to achieve this goal by convincing GameStop to adopt an online model that can challenge Amazon. For example, customers would be allowed to conveniently trade in their games online and ship the discs rather than physically walk into a store. Additionally, Cohen wants to improve GameStop’s existing services by offering more products for sale online, and shipping them quickly.
We don’t know the full extent of Cohen’s plans but analysts are already skeptical about GameStop’s ability to become an Amazon competitor.
“There are a lot of companies with much deeper pockets than GameStop that have had a very difficult time competing against Amazon, and some are barely competing with Amazon – Walmart, for example,” Loop Capital analyst, Anthony Chukumba, told Bloomberg. “I have a hard time foreseeing how GameStop can morph into a credible competitor to Amazon.”
Cohen is the mastermind behind Chewy.com – a pet supply giant that he later sold for $3 billion. Whether he can turn things around for GameStop or not remains to be seen.