Chairman Ryan Cohen Just Bought GME Stock. Here’s Why.

Shares of GameStop (NYSE:GME) are in the spotlight once again after GME stock closed up 30% yesterday. However, chairman Ryan Cohen was able to capture some of these gains. Yesterday, Cohen purchased 100,000 shares of GameStop through his investment firm, RC Ventures. Shares were purchased at prices ranging from $96.85 to $108.27, resulting in a total transaction value of $10.1 million. After the purchase, RC Ventures and Cohen own 9.1 million shares of GameStop, which equates to a 11.9% ownership stake. Today, shares of GME stock are trading over 10% higher.

Photo of the Gamestop (GME) logo On a Mobile Phone.
Source: Shutterstock / mundissima

Insiders may sell shares for a variety of reasons, such as for personal expenses, tax expenses or a loss of faith in a company. However, insiders only buy shares for one reason: they believe the price will go up. Cohen’s bullish stance on GameStop was further demonstrated after he posted this tweet last night:

However, this isn’t the only purchase that Cohen has reported this month. On March 7, Cohen disclosed a 9.8% stake in Bed Bath & Beyond (NASDAQ:BBBY) through RC Ventures. Cohen also penned a letter to Bed Bath & Beyond’s board, urging them to spin off BuyBuy Baby and to “Evaluate a Full Sale to a Well-Capitalized Acquirer.”

Cohen’s purchase contrasts with the actions of two billion-dollar investment firms, Maverick Capital and Susquehanna Securities. On March 14, Maverick disclosed that it had sold its entire 4.6 million share stake of GameStop. Also on March 14, Susquehanna disclosed that it had sold roughly 1.4 million shares of GME stock, cutting its position by 30%. Susquehanna still owns 3.05 million shares, equating to a 4% ownership stake.

GME Stock: What Is RC Ventures?

RC Ventures is a “seed and venture capital firm” that primarily focuses on investing in early stage companies with potential for high growth. Furthermore, the firm seeks to provide entrepreneurs with “capital, network, and mentorship,” with the goal to “create opportunities, unlock potential and drive inclusive and lasting impact.”

The firm’s portfolio includes investments in several emerging markets, such as Pathao, Tuk and Truck Lagbe. In addition, RC Ventures had previously owned shares of GameStop and last bought shares around the $8 price level.

On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the Publishing Guidelines.

Eddie Pan specializes in institutional investments and insider activity. He writes for InvestorPlace’s Today’s Market team, which centers on the latest news involving popular stocks.

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