The former meme-stock favorite’s car-crash appearance made for grim viewing
What’s the cost of a bad interview? If you ask video game retailer GameStop – whose CEO Ryan Cohen had a torrid time appearing on CNBC last week – it can come out to about 10 percent of your share price.
Amusing clips of Cohen’s awkward pauses – and memes constructed from his wildly varying facial expressions – have been doing the rounds on the internet since the conversation, which centered on his $56 bn offer to buy online trading website eBay.
The immediate aftermath of the interview was a 10 percent slide in GameStop’s share price, which has continued to gutter in the days since as discourse around the deal soured. This week, Paul Pressler, chairman of eBay’s board, rejected the bid, calling it ‘neither credible nor attractive’.
Many IROs will have been watching the story unfold with a keen sense of the true cost of having a CEO, CFO or other senior leader who needs some extra media training.
Some context is important around Cohen’s interview. In 2011, he founded Chewy with the aim of becoming an online pet supplies business that could compete with Amazon. Through years of skepticism, Cohen stuck to his guns to eventually sell off the company to PetSmart for $3.35 bn in 2017. He took that money to found RC Ventures, an investment vehicle that took up a huge position in GameStop, seen at the time as a doomed dinosaur from the bricks-and-mortar retail era.
However, his arrival sparked speculation on Reddit forums like r/WallStreetBets as pandemic lockdowns kept people indoors (and spending more time browsing). He was heralded as an anti-establishment figure who would challenge the short-sellers.
We all know the rest of the story: GameStop shares exploded in early 2021 as retail traders jumped on the bandwagon, triggering a colossal short squeeze and propelling the stock from $5 to a peak of around $500, wiping out billions of hedge fund holdings in the process. Many dubbed Cohen the ‘Meme King’ in the aftermath, particularly for his cryptic public presence.
This week has revealed the drawback to that approach. What should have been a routine appearance on CNBC became a catalogue of strange behavior: over its 16-minute runtime he appeared distracted, perplexed and a little bewildered, while also fixated on CNBC’s apparent agenda against his company.
In response to host Michael Santoli suggesting that eBay has long been a public company, while GameStop’s revenue is decreasing, Cohen can only ask: ‘Didn’t you guys call for GameStop’s demise multiple times?’
‘Look at our financial performance,’ Cohen added. ‘Is it better than you guys anticipated?’
The CEO did not back down from there, however: he then started manically listing his personal items on eBay ‘to pay for eBay’, including baseball cards and a pair of his socks. He also spent the week criticizing eBay on social media, tweeting about its financial performance, a board member’s social media activity and previous controversies.
Fast forward a week, and the deal is apparently dead in the water, with significant question marks remaining over GameStop’s ability to fund the $56 bn deal.
In some ways you could argue that Cohen has been a net positive for GameStop, rescuing the retailer from obscurity with a daring PR campaign during lockdown and steering it into a new future.
However, his fellow executives – and presumably his IR team – will be counting the cost of the failed bid and of a share price slide that seems to be continuing into the following week.
Whether in terms of reputation management, brand protection or even just ensuring that a hostile takeover bid is received as well as possible, the cost of a CEO who makes a bad public impression is significant.
IR teams may well turn to some media training – or at least a stern briefing – for their management to make sure no one ‘pulls a Cohen’ in the future.
