Among Monday’s 100 most bullish price surprises -- stocks with high standard deviations and above-average volatility -- was GameStop (GME), the failing video game and collectibles retailer helmed by Ryan Cohen. 

The highest standard deviation yesterday was Astrazeneca (AZN), the UK-based drug giant, at 4.57. It topped the list due to increased volume resulting from listing its ordinary shares on the NYSE, replacing its American Depositary Receipts. 

As for GameStop, its standard deviation was 2.81, putting it firmly in the top 100 of bullish price surprises.   

Scion Asset Management founder Michael Burry, who deregistered his hedge fund in November, likens Cohen to a Warren Buffett in waiting because of the GameStop CEO’s maneuvers to turn his failing video game and collectibles business into a Berkshire Hathaway (BRK.B) wannabe. 

Burry’s a bright guy; I’m not going to suggest otherwise. He sees similarities in Warren Buffett’s early career moves to Cohen’s; I believe that’s not the case.

Here are three reasons why. 

Warren Buffett Was Already Steeped in Investing Experience

Warren Buffett was 26 when he started the Buffett Partnership Ltd. in 1956 in Omaha, Nebraska. The partnership’s initial capital was $105,000. The seven limited partners were friends and family—nothing spectacular or earth-shattering about its beginnings.

Of course, Buffett had been investing informally for 15 years (he bought his first stock at 11) when he set up the partnership. It also helped that his professor at Columbia Business School was Ben Graham, considered the father of value investing. Buffett subsequently worked for the man for two years in New York after finishing school, until Graham closed the business and Buffett moved back to Omaha. 

By 1969, Buffett closed the partnership, telling his limited partners that there weren’t enough good investments available due to the lengthy market run-up. Over the 13 years of the partnership, his limited partners received a cumulative return on their investment of 1,502.7%, with a compound annual growth rate of 23.8%, more than three times the Dow's. 

Ryan Cohen’s investment experience, at least as it relates to his ability to run a holding company that invests in both public and private companies, began after he sold Chewy (CHWY), the online pet products business he co-founded, to PetSmart in 2017 for $3.35 billion.

Cohen reportedly netted $1 billion from the sale. He poured most of the funds into Apple (AAPL) and Wells Fargo (WFC) stock. 

“‘It’s too hard to find, at least for me, what I consider great ideas,’ Cohen said in a June interview. ‘When I find things I have a lot of conviction in, I go all-in,” Bloomberg reported in January 2021.

So, let’s say that Cohen’s investment journey began in May 2017, immediately after the deal to sell Chewy closed. At the time, he was approximately 31. 

There is no comparison between the two in terms of investment training.

Cohen’s Chewy Continues to Struggle

I don’t want to downplay the man’s success. Cohen and his co-founder, Michael Blake Day, grew Chewy into the leading online specialty pet products retailer in just six years. That’s an impressive feat for which the two men were handsomely rewarded. 

However, the financial success they achieved was a combination of hard work and excellent timing. Between 2010 and 2017, the U.S. pet industry grew by 50%, from $48 billion to $70 billion; in 2024, it was $150 billion, and $350 billion worldwide. 

The movement toward pet ownership accelerated into the 2020s — you do have to give credit to them for recognizing this was a secular trend transforming households everywhere. 

More importantly, despite the massive tailwind, the business has struggled to turn a profit, even as it’s posted tremendous revenue growth. In fiscal 2016 (year-end January 2017), Chewy had revenue of $1.44 billion and an operating loss of $167.7 million, according to S&P Global Market Intelligence. 

In the nine years since, revenues have grown to $12.58 billion (774% growth) and operating profit to $202.1 million, with an operating margin of just 1.6%. By comparison, Kroger's (KR) and Costco’s (COST) operating margins are 3.2% and 3.8%, respectively. I don’t know about you, but I’ll take Costco stock over GameStop every day of the week and twice on Sundays. 

In the nine years since Chewy was sold, it’s generated an annual operating profit about one-third of the time. 

The verdict is still out on whether Chewy can deliver consistent and profitable growth. But that’s no longer Cohen’s concern. 

The Conglomerate Difference

Burry’s thesis is that Cohen is turning a crappy video game retail business into a conglomerate over time.

“‘Ryan is making lemonade out of lemons. He 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,’” Investing.com reported his comments from his Cassandra Unchained Substack. 

In January, Cohen acquired 1 million shares of GameStop for $21.4 million, bringing his stake to 38.35 million shares, or 8.56%, making him the largest shareholder. He’s also been CEO since September 2023.

The one thing he’s been consistent about since first investing in GameStop in April 2019 is pushing for store closures. On Jan. 30, 2021, it had 4,816 stores. By the end of January 2026, that number had fallen to approximately 2,733, a 43% reduction in five years. 

At the same time, as Burry noted, the company completed ATM (at-the-market) share offerings totaling $3.47 billion between May and September 2024. It also sold 2030 and 2032 convertible notes for another $4.2 billion in proceeds through November 2025. For every $1,000 of principal, the 2030 convertible note holders got 3.34970 warrants to buy GME shares at $32, while the 2032 convertible note holders got 3.458732 warrants to purchase shares at $32.   

As a result of these two transactions, its long-term debt went from $14.9 million in the quarter before the ATMs were completed in 2024 to $4.16 billion after convertible notes were issued in October. At the same time, its cash and short-term investments increased to $8.83 billion from $1.08 billion. It’s a significant change to the balance sheet, to be sure.

Lastly, in May 2025, it acquired 4,710 Bitcoin at an average price of $108,917. As I write this, that investment is down 30% in just eight months. 

According to Burry, the rationale for buying GameStop stock is that Cohen is positioning the company to make a significant acquisition that would substantially increase its future cash flow. 

He argues that the price he paid for GME stock will soon be 1x tangible book value. Right now, it’s 2.2x, so he’s suggesting the tangible book value will double before long. That’s quite aggressive.

Can he do it? Burry says yes. I guess we’ll see.

Bottom Line: Cohen Is No Warren Buffett

While there are similarities between what Buffett did and what Cohen is doing to transform a poor business -- using tax loss carry-forwards, reducing capital expenditures, boosting cash flow, and acquiring high-quality assets with sustainable cash flow growth -- Buffett’s best move was the purchase of National Indemnity in 1967.

The first of many insurance acquisitions that allowed Berkshire to leverage its “float,” the difference between the premiums it takes in and the claims it pays out in a given period. 

In 1967, the float at National Indemnity was $16 million. By 2009, it had grown to $62 billion. As of Sept. 30, 2025, it was $176 billion, a compound annual growth rate of 17.4%.

While Cohen might be able to buy a cash flow gusher, he’ll have to pay dearly for it, most likely having to issue a ton of stock to make it worthwhile. Buffett was always loath to do so.

“‘I would rather prep for a colonoscopy than issue Berkshire shares,’ Buffett wrote in his 2016 annual shareholder letter,” Barron’s contributor Andrew Bary reported in August 2025. 

One thing that Burry overlooks is that Buffett had Charlie Munger as a sidekick, arguably one of the smartest lawyers-turned-investors in corporate America history.

Who does Cohen have? 

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