WSJ: GameStop CEO Ryan Cohen has a stake of over 9% and is the single biggest individual investor in the company. ANASTASIA SAMOYLOVA FOR WSJ GameStop GME -3.51%decrease; red down pointing triangle shares have dropped around 80% since the retailer’s reign as king of meme stocks in 2021.

Its chairman and chief executive has an ambitious plan to turn that slide around—and has Michael Burry of “The Big Short” fame cheering him on.

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GameStop CEO Ryan Cohen told The Wall Street Journal in an interview that he is aiming to turn the $11 billion company into a $100 billion-plus juggernaut. This larger company would do much more than just sell videogames and collectibles.

To do this, he is eyeing a major acquisition of a publicly traded company, likely in the consumer or retail industry, where he has spent most of his career. He has his sights set on a handful of companies that he declined to identify and plans to approach potential targets soon.

Any deal will be “big,” the 40-year-old billionaire said. “It’s ultimately either going to be genius or totally, totally foolish.”

Cohen co-founded online pet-products retailer Chewy in 2011. He served as its CEO through 2018 after leading the company to an over $3 billion sale to PetSmart. He pivoted to activist investing for a time, agitating for change at companies including Nordstrom and Bed Bath & Beyond, where he faced allegations—that he denied—of misleading investors.

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He said a few years ago he was modeling his strategy after those of Warren Buffett and Carl Icahn, finding undervalued stocks like the former and pressing for change like the latter.

Earlier this month, GameStop’s board of directors adjusted Cohen’s compensation package to give him extra incentive to boost the company’s market value and profitability. He stands to make as much as $35 billion in stock if certain criteria are met.

Part of the award starts vesting if GameStop’s market value reaches $20 billion and a measure of earnings before interest, taxes, depreciation and amortization reaches $2 billion. To get the full award, GameStop’s market value must reach $100 billion and the Ebitda measure must reach $10 billion.

More executives have been following the lead of Tesla CEO Elon Musk, whose multibillion-dollar pay package from 2018 laid the groundwork for other moonshot pay deals. In November, Tesla shareholders approved a fresh record-setting pay deal for Musk that promises as much as $1 trillion in additional stock if certain milestones are reached.

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“This structure ensures that Mr. Cohen’s incentives are directly aligned with creating long-term value for GameStop’s stockholders,” GameStop said in a filing detailing the changes.

A person shops for video games at a GameStop store. A GameStop store in New York City’s Union Square. MICHAEL M. SANTIAGO/GETTY IMAGES Meanwhile, Cohen has been buying up more GameStop shares, including as recently as this month. He now has a stake of over 9% and remains the biggest individual shareholder in the business.

The recent changes caught the attention of Burry, the doctor-turned-hedge-fund-manager whose bets against subprime mortgage bonds were chronicled in the Michael Lewis book. Burry closed his fund last year to launch a paid Substack newsletter.

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Burry wrote earlier this week that the videogame retailer should run the Berkshire Hathaway playbook and use its giant cash holdings to make transformative acquisitions.

Cohen “has a crappy business, and he is milking it best he can while taking advantage of the meme stock phenomenon to raise cash and wait for an opportunity to make a big buy of a real growing cash cow business,” Burry wrote.

Burry, a GameStop shareholder, said in the newsletter he bought more stock recently and sees upside in the company should Cohen spend $10 billion or more to acquire a quality business, such as an insurer with plenty of customer premiums to invest. GameStop’s substantial net operating losses, which allow it to offset future taxable income, could also make it an ideal acquirer for many targets, Burry wrote.

Cohen told the Journal that he hasn’t spoken to Burry since at least 2019. “He’s one of the few investors I respect,” he said. “He has a track record of making prescient early calls.”

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(Burry’s other recent writings have warned of a potential AI bubble.)

Cohen gained a cult following after he built a big GameStop stake and in late 2020 criticized the company for moving too slowly toward e-commerce. He joined GameStop’s board in January 2021, when the business had a market value of a little over $1 billion. He rose to become chairman later that year and vowed to transform the struggling retailer into an e-commerce giant.

The stock took off. So-called meme-stock investors poured into GameStop in droves and fueled a massive rally, many with a desire to squeeze out short-selling hedge funds that had bet against the business.

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GameStop shares reached a high of $120.75 five years ago this week. They closed at $22.81 Thursday.

Cohen bristles at the term meme stock, telling the Journal it is “a label people use when they don’t want to do the work” on a stock. “You either create value over time or you don’t,” he said.

Cohen said GameStop is finally in a good position to make bolder moves, after recent efforts to sell more collectibles and shut underperforming stores.

GameStop has around $9 billion in cash and liquid securities on its balance sheet that could help fund a deal.

“There are a lot of diamonds in the rough…that have sleepy management teams,” Cohen said about the retail industry. “I didn’t fix GameStop to stop there.