Shares of GameStop (GME) gained as much as 7% on Wednesday after the company’s board revealed a performance-based compensation plan for its billionaire CEO Ryan Cohen.
Even though Cohen won’t receive any guaranteed compensation, he will still bank billions as long as GME’s market cap grows tenfold and its cumulative EBITDA performance reaches around $10 billion by 2035.
Despite today’s gains, GameStop stock is down about 40% from its 52-week high.
Cohen’s new compensation plan only fully vests if GameStop’s valuation hits $100 billion, no small feat considering its market cap was only around $34 billion at its peak in 2021.
Investors applauded the announcement primarily because the compensation package suggests Cohen continues to see a big future for the gaming retailer.
It speaks to the billionaire’s confidence in his ability to turn around GameStop, a NYSE-listed company that has long been considered a sinking ship.
And given his track record, Cohen’s conviction could be a strong enough reason to consider holding GME stock for the long term.
Beyond Cohen’s show of faith, there are other reasons that warrant at least some exposure to GME stock in 2026.
The Texas-based company is expanding into high-margin categories like collectibles, which led to a sharp increase in net income to $77 million in its most recent reported quarter.
Additionally, the recent crypto pivot could also spark a rally provided Bitcoin (BTCUSD) sees a significant rebound this year.
According to Barchart, options data is also largely trending higher. Derivative contracts expiring on June 18 currently have an upper limit set at around $26, indicating that GameStop could rally up to 23% over the next five months.
On the other hand, a major red flag on GME stock is the lack of coverage from Wall Street, which means limited analyst scrutiny, institutional interest and liquidity.
Without research reports or price targets, investors have little or no professional advice, making GameStop shares more vulnerable to excessive volatility, speculation and sentiment-driven swings.
As of the date of publication, Wajeeh Khan did not have (directly or indirectly) any position in any of the securities mentioned in this article. All information and data contained in this article are for informational purposes only. This article was originally published on Barchart.com
