GameStop (GME) shares gained as much as 7% on Wednesday after the company’s board revealed a performance-based pay plan for its billionaire chief executive Ryan Cohen.
While Cohen won’t receive any guaranteed pay, he will still bank billions as long as GME’s market cap grows by tenfold and its cumulative performance EBITDA hits about $10 billion by 2035.
Despite today’s gains, GameStop stock is down some 40% versus its 52-week high.
Cohen’s new pay plan fully vests only if GameStop’s valuation hits $100 billion, which isn’t a small feet given its market cap stood at about $34 billion only at its peak in 2021.
Investors cheered the announcement primarily because the compensation package suggests Cohen continues to see a big future for the gaming merchandise retailer.
It signals the billionaire’s confidence in his ability to turnaround GameStop, an NYSE-listed firm that has long been viewed as a sinking ship.
And given his track record, Cohen’s conviction may be a strong enough reason to consider owning GME stock for the long term.
Beyond Cohen’s show of faith, there are other reasons that warrant at least some exposure to GME shares in 2026.
The Texas-based company is expanding into high-margin categories like collectibles that drove a big increase in net income to $77 million in its latest reported quarter.
Plus, the recent crypto pivot may also trigger a rally provided that Bitcoin (BTCUSD) experiences a significant rebound this year.
According to Barchart, options data is skewed largely to upside as well. Derivatives contracts due Jun. 18 currently have the upper bound set at about $26, indicating GameStop may rally up to 23% over the next five months.
On the flip side, a major red flag on GME stock is the lack of Wall Street coverage, which means limited analyst scrutiny, institutional interest, and liquidity.
Without research reports or price targets, investors have little to no professional guidance, making GameStop shares more vulnerable to excess volatility, speculation, and sentiment-driven swings.
On the date of publication, Wajeeh Khan did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Barchart.com
