In January 2021, Ryan Cohen joined GameStop. The company was bleeding money, losing market share to digital downloads and had become—by most accounts—a retail ghost waiting to be forgotten. The financial media was writing the obituary.
Last weekend, he made a $56 billion unsolicited bid to acquire eBay.
Whether that deal closes is a separate question, and right now, the market is genuinely skeptical. Prediction markets on Kalshi give GameStop only a 26% chance of completing the acquisition in 2026. Cohen’s first CNBC interview after announcing the bid was widely described as combative and evasive, offering limited clarity on financing while repeatedly directing viewers to the company’s website. As for eBay, the board confirmed it received the proposal and is reviewing it, a response that raised rather than reduced market doubt about whether the transaction can actually close.
But here’s the thing: The playbook that got Cohen to this moment is worth understanding regardless of how this particular bet lands. A company the world dismissed as a meme-stock punchline now has nearly $9.4 billion in liquid assets and is attempting to build a credible rival to Amazon. How that happened—and what you can take from it—is one of the most instructive entrepreneurial case studies of the decade.
The Man Behind 2 Unlikely Comebacks
Cohen’s track record deserves a closer look before you dismiss this as a Wall Street story.
He co-founded Chewy in 2011, an online pet supply company in a category Amazon had effectively claimed. By 2017, PetSmart acquired Chewy for $3.35 billion, making it the largest e-commerce acquisition in history at that point. Cohen’s edge wasn’t a better product. It was an obsessive commitment to customer service in a market most people assumed was already decided.
He applied the same logic at GameStop. When he joined the board in early 2021, the company was hemorrhaging money and relevance. By the time Cohen formally became CEO in September 2023—accepting no salary, no cash bonus and no golden parachute—he had already gutted the leadership team, replaced it with executives from Amazon and Chewy, slashed underperforming stores and quietly stockpiled cash. GameStop swung from a $381 million net loss in 2021 to $418 million in net income in its most recent fiscal year.
The GameStop turnaround is real and documented. What comes next is unresolved. The methodology behind both is worth your attention.
Step 1: Stop Defending the Dying Model
The most expensive mistake in business isn’t failing. It’s failing slowly while pretending you’re not.
GameStop’s physical retail model was not coming back. The shift to digital downloads and streaming had already made it structurally obsolete. Everyone in the building knew it. The original leadership team simply couldn’t bring themselves to stop defending the thing that had made the company successful in the first place.
Cohen stopped defending it. According to Harvard Business Review, successful pivots begin with a single critical act: facing reality before it becomes undeniable. Not when the numbers force your hand—before that. Leaders who wait for crisis to validate what they already know are already late.
The question isn’t whether your current model will keep working. The question is when it won’t and whether you’ll acknowledge it while you still have options.
Step 2: Inventory What You Actually Have
Here’s where most pivot attempts collapse. The entrepreneur abandons the dying model and tries to start from scratch, burning time and resources chasing something unrelated to any existing advantage. That’s not a pivot. That’s a restart, and the odds are brutal.
Cohen didn’t do that. He took stock of what GameStop actually had. The list was more valuable than anyone had noticed: 1,600 physical retail locations across the United States, a customer base built around collectibles and trading cards, a brand with universal recognition, and after a disciplined cost-cutting campaign nearly $9.4 billion in liquid assets.
The insight every entrepreneur needs to internalize is this: The business you’re in is not the same as the assets you’ve built. The former may be dying. The latter may be worth more than you’ve ever given it credit for. Before your next move, take an honest inventory—not of what your business sells, but of what it has. Relationships. Infrastructure. Reputation. Specialized knowledge. A customer list. Operational muscle. That inventory is your real starting point.
Step 3: Find the New Game Worth Playing
Once you know what you have, the question becomes: What is worth building with it?
Cohen’s answer wasn’t to double down on gaming. It was to become a capital allocator, using the cash he’d built to identify undervalued businesses and acquire them. His thesis on eBay is concrete: The platform’s biggest weakness is physical infrastructure for authentication, intake and fulfillment. GameStop’s 1,600 domestic retail locations are presented as a ready-made solution that pure digital competitors can’t quickly replicate.
Whether the thesis survives contact with eBay’s board and shareholders is another matter entirely. Michael Burry—who had originally backed Cohen’s strategy—sold his GameStop position after the bid, warning that the proposed leverage could push the combined company to roughly 7.7 times debt to EBITDA, a level he compared to Wayfair and Carvana at their most distressed. His pointed summary: “Never confuse debt for creativity.”
That critique is worth sitting with. Ron Ashkenas, writing in a Harvard Business Review analysis on strategic course corrections, draws the critical distinction between pivots driven by genuine market opportunity and those driven by desperation or the lure of a new shiny object. The lesson for founders isn’t that Cohen is right or wrong about eBay. It’s that identifying a new game worth playing requires honest stress-testing—not just bold conviction. The best pivots are bold to the outside world and rigorous on the inside. Being one without the other is where things come apart.
Step 4: Tie Your Incentives to the New Direction, But Make Sure the Direction Is Sound
This is the step most founders skip, and its absence quietly undermines every other move they make.
Cohen’s compensation at GameStop has always been tied to outcome, not activity. His CEO package is structured entirely around market capitalization and earnings thresholds—no salary, no floor, no guaranteed payout. He’s stated he would lead the combined GameStop-eBay entity under the same terms if the acquisition closes.
Aligned incentives matter. But Burry’s exit is a sharp reminder that skin in the game doesn’t automatically validate the strategy itself. When your financial outcome is identical to your company’s financial outcome, your decisions change for the better. You stop hedging. You stop protecting the old model out of self-interest. The risk is that conviction can start to crowd out scrutiny. The most effective version of this step isn’t just tying your pay to the outcome. It’s tying your pay to the outcome and then asking your harshest critic to poke holes in the plan before you commit.
For you, that means two things. First, audit whether your incentives are actually pulling you toward the right move or quietly rewarding you for protecting the familiar one. Second, separate the alignment question from the strategy question; answer both, in that order.
Your Pivot Readiness Framework
Before you make any significant strategic shift, run through these five questions in order. Don’t move past one until you can answer it clearly.
Am I defending this model because it’s still viable, or because I’m attached to it? Attachment and viability are not the same thing, and your gut will try to convince you they are.
What does my business actually have, not what does it sell? Write down your real assets: relationships, infrastructure, reputation, operational systems, customer trust. Not your product.
What problem can I solve with those assets that no one else is positioned to solve? That’s your new direction. If you can’t name it specifically, you’re not ready to move.
Is this new direction driven by real market opportunity or by desperation? Desperation produces activity. Opportunity produces strategy. Know which one is driving you and stress-test the answer with someone who will push back.
Do my incentives align with the direction I’m choosing? If not, fix that first. Misaligned incentives will sabotage aligned strategy every time.
The GameStop-eBay story isn’t finished. It may not end the way Cohen intends. But the moves that built a $9 billion war chest out of a dying video game retailer—the clear-eyed recognition of a failing model, the honest asset inventory, the patient capital accumulation, the outcome-only compensation—those are documented, verified and repeatable.
You don’t need $9 billion to follow the playbook. You need the discipline to stop defending what’s not working, the clarity to see what you actually have and the rigor to test your next move before you bet the company on it.
Featured image from Pamela Ranya/Shutterstock
