Exactly one month ago, we introduced the world to Ryan Cohen – the guy who bought 9 million shares of GameStop stock in the middle of 2020 when it was trading at $8 a share. Our original article, published on January 28, would go on to be one of the most-read articles in Celebrity Net Worth history, reaching 12 million people on Facebook alone. This was in the middle of the first wave of GameStop mania, when the price per share soared from $19 to $400+, making the little-known Ryan Cohen a multi-billionaire on paper. As GameStop's stock dropped back down to reality, landing in the $40-50 range, we assumed the mania was over. We were wrong. GameStop mania is back baby! And it’s all because of a photo of an ice cream cone…
A Quick Backstory
Before becoming GameStop famous, Ryan Cohen was known for being the co-founder of online pet food/toy company Chewy.com. In 2017 Chewy was acquired by PetSmart for $3.35 billion. PetSmart took Chewy public in 2019. Today Chewy has a market cap of $42 billion.
Cohen earned several hundred million dollars from the original PetSmart sale. As we mentioned previously, at some point in the middle of 2020, Ryan acquired 9 million shares (9,001,000 to be exact) of GameStop at an average price per share of $8. He now owns roughly 10% of GameStop. In total he spent around $76 million acquiring his shares. He was given a seat on GameStop's board of directors and mostly stayed quiet for the next few months.
In November 2020, Ryan posted a public letter to GameStop's board of directors that blasted the company's performance. At the time the company's share price was around $10. Five years earlier, the share price was around $30.
[Disclaimer – I do not own any shares of GameStop and this article is not advising you to buy or sell shares in anything. It is purely informational/entertainment…]
Mania Part 1
In mid-January things started to get a little… funky. GameStop popped to $20, then $40, then $70. On January 26, the stock ended the day a few pennies below $148. For a brief shining moment on Wednesday January 27, GameStop shares hit $483 per share. At that level, Ryan's 9 million shares were worth a bit below $4.4 billion.
Mania Cools Down
The mania started to cool on January 28. On that day, GameStop ended at $193 per share. At that level, Ryan's stake was worth $1.7 billion. The following day, January 29, GameStop ended at $325, pushing Ryan's stake to $2.995 billion.
By February 1, GameStop closed at $225, reducing Ryan's stake to $2.025 billion. On February 2, GameStop closed at $90, lowering Ryan's stake to $810 million. By February 11, GameStop closed at $51 per share, making Ryan's 9 million GameStop shares worth $460 million.
Mania Part 2
On Tuesday, February 23, GameStop stock closed the day at $44.97 per share. The next day, at 1:57 PM EST, Ryan posted a photo of a McDonald's ice cream cone and a frog emoji to Twitter. This seemingly simple act caught many by surprise.
To understand the significance, one must consider a financial term called "Moving Average Convergence Divergence" or MACD. This term is viewed by some finance enthusiasts as a trend-following momentum indicator that signals when a stock might be overbought or undersold. The ice cream cone in Cohen's tweet was a clever nod to this financial terminology.
The frog emoji, on the other hand, relates to a concept in trading where stocks about to cross from being oversold to being bought are referred to as "going froggy." When Ryan sent his tweet, GME was at $49, and just two and a half hours later, it closed at $91.
As the market opened the following day, GME began at $151 and ended the week at $101. To illustrate the impact of Ryan's tweet:
- At the moment Ryan sent his tweet, his 9 million shares were worth $441 million.
- When markets closed a few hours later, his shares were valued at $819 million.
- When markets opened the next day, his shares briefly surged to $1.36 billion.
- At the end of trading that Friday, his shares closed at $915 million.
When the markets closed on Monday, GameStop saw an 18% increase, bringing Ryan's shares to a remarkable value of $1,083,720,400. Are we in for another couple of loops in this roller coaster? We'll keep you posted!
