GameStop’s Ryan Cohen Wants to Be More Than a Meme-Stock King

As his son tells it, the glassware business was struggling when the elder Mr. Cohen took it over and turned it around. He would arrive for work at 6 a.m., remove his suit jacket and go to the warehouse to help the workers unload pallets. He then returned to his office dripping with sweat to turn his attention to the company’s sales and accounting and keeping tabs on his inventory of 500 different products.

His father, Mr. Cohen said, also bought stocks with every dollar he didn’t need to comfortably support his family. He preferred blue-chip companies, railroads and utilities and owned shares in Canadian banks. He read the newspaper from cover to cover each day.

Mr. Cohen said he and his father became closer as he grew older. They played catch and went to the movies together and on certain weekends would ride snowmobiles across a frozen lake north of Montreal before a lunch of hamburgers and poutine. His dad also took him to videogame store EB Games, a predecessor of GameStop, where the young Mr. Cohen would buy games he liked to play such as “Call of Duty.”

When the younger Mr. Cohen was 12 or 13, his father showed him an 80-year history of the stock market. Returns for stocks had exceeded those for real estate. Mr. Cohen began purchasing stocks on his own, using money he made building websites for local businesses. His first shares, he said, were Apple and

Toronto-Dominion Bank.

He never worked at his father’s glassware business but did build a website for it. His father, he said, supported his decision to skip college and focus on being an entrepreneur. “He said, ‘It doesn’t matter what I think; whatever decision you make is the right decision for you.’” Mr. Cohen started freelancing in affiliate online marketing, which involved purchasing internet ads and earning a fee when they generated a sale for a merchant.

He came up with the idea for Chewy in 2011 after visiting his neighborhood pet store to buy products for his poodle; he and his co-founder, a computer programmer from the state of Georgia whom he had met years earlier in a chat room, ditched their plans to open an online jewelry store instead. Mr. Cohen said his father became his “silent board member,” acting as a sounding board for his decisions despite having no role or stake in the company.

He launched Chewy in Florida, where his grandparents vacationed, and within a matter of years built it into a self-sustaining business whose growth made it a major threat to established industry players. By 2016, same-store sales were declining at rival PetSmart Inc.—the product, at least in part, of Chewy’s rapid rise. Raymond Svider, chairman of private-equity firm BC Partners, which owned PetSmart, eventually emailed Mr. Cohen asking if he wanted to sell Chewy.

Nancy Peretsman,

a partner at investment bank Allen & Co., which had invested in Chewy, advised Mr. Cohen in the negotiations. She urged him to raise more money as an insurance policy so he wouldn’t be forced to sell, putting him in a stronger negotiating position with PetSmart. Mr. Cohen agreed even though it would mean diluting his existing investors and himself.

“Ryan, up until that point, could have been easily categorized solely as an entrepreneur,” Ms. Peretsman said. “Many of his ilk would have said: ‘We’re gunning for it.’ I think it was the first breadcrumb of what you’ve seen him evolve into, which is a much more balanced and conservative business person.”

If he didn’t sell, Mr. Cohen would have faced the difficult task of preparing Chewy for an initial public offering. That seemed like a risky option, given how other public e-commerce companies were trading. Then his father suffered a major heart attack, just weeks after the birth of Mr. Cohen’s first son. The elder Mr. Cohen survived.

The $3.35 billion PetSmart paid for Chewy in 2017 set a record for the highest price for an e-commerce company. Mr. Cohen sold his entire stake, earning about $1 billion before taxes. He left as the CEO in 2018.

‘Papa Cohen’

Mr. Cohen’s father died in December 2019. Not long after that, the son turned to activist investing.

It started with GameStop. When he began buying shares of the retailer earlier in 2019 he said he saw an inexpensive stock beset by a high volume of wagers against it. He liked its loyal customer base—something that reminded him of Chewy. With the right leadership, he thought, the company could be revitalized.

“The more diligence I did, the more I got to understand [its] leadership and management, the more I realized they were the opposite of me,” he said. “They couldn’t possibly do the right thing because they weren’t risking their own capital.”

Mr. Cohen publicly revealed his activist position in GameStop in August 2020 in a regulatory filing, sending the company a letter in November 2020. In January 2021, the retailer added him and two of his former Chewy colleagues to its board.

Interest in GameStop had already been brewing in online communities such as Reddit’s WallStreetBets forum. News of Mr. Cohen’s appointment to GameStop’s board helped kick the stock into overdrive. GameStop bulls sent the stock as high as $483 a share that month, up from less than $20 at the start of the year. Online they began calling Mr. Cohen “Papa Cohen.”

Mr. Cohen pushed for GameStop executives, including its then-chief executive and chief financial officer, to step aside and urged the company to invest in becoming a more modern retailer. Following a mass exodus of directors and officers, GameStop named him chairman in June 2021.

Thousands of individual investors continue to scour Mr. Cohen’s social media posts for clues about where the company or stock might be headed. For example, many interpreted the photo he tweeted last year, which featured him with chopsticks up his nose and split between his nostrils, as a hint about GameStop’s forthcoming stock split.

“He’ll post a picture of Blockbuster or chopsticks up his nose, and immediately, people are going to try to start interpreting what that means,” said Sam Elder, a 23-year-old from South Florida who left his job in software engineering last year to trade full-time. He learned about Mr. Cohen on Reddit in early 2021 and bought shares in GameStop.

People who have worked with Mr. Cohen say the meme-stock phenomenon came as a surprise to him but that he embraced it, and it has added a bit of swagger to his otherwise unassuming personality.

“I don’t think he’s doing this for notoriety, but that notoriety actually helps him,” said Jay Park, who made an early investment in Chewy while at

BlackRock Inc.

and has since founded private-equity firm Prysm Capital.

Because Mr. Cohen avoids touting his own holdings or giving investment advice—something his father cautioned him against—he doesn’t engage directly with individual investors. His tweets are a demonstration of his personality, he said. “I’m just being me; I’m just being myself.” He added: “I don’t want to speculate on how people interpret it.”

The retailer’s stock price has since fallen from its meteoric highs, and Mr. Cohen has remained tight-lipped on the company’s turnaround plan. He says he doesn’t spend much time looking at what analysts have said about his strategy—or that of any company, for that matter.

He collects no compensation for his role at the company. But so far, his more than 36 million shares have earned him roughly $900 million in paper profits, regulatory filings show.

Mr. Elder, the 23-year-old individual trader, said he hasn’t been excited by some parts of the company’s attempted turnaround, such as its expansion into nonfungible tokens, but he continues to back Mr. Cohen. “I’ve got a lot of high hopes, enough so that my money touches whatever he touches,” he said.

New criticism

Business lessons imparted by his father also helped motivate Mr. Cohen’s activist campaign at

Bed Bath & Beyond Inc.

“Like my dad, I much prefer to associate with productive members of society who actually do real work,” Mr. Cohen said. “When I think of Wall Street or board directors, they don’t do anything, and they make all kinds of money. When I see the establishment making hundreds of thousands of dollars in risk-free compensation, it hits a nerve.”

He criticized what he described as the outsize compensation for Bed Bath & Beyond executives when revealing in March a 9.8% position in the company. He also urged it to narrow its focus and explore either a separation of its Buybuy Baby chain or a sale of the entire company.

Within weeks, the company struck an agreement with Mr. Cohen, adding three new directors of his choosing. Still, sales declines and liquidity problems worsened over the subsequent months.

Then, in August, something unexpected happened: Bed Bath & Beyond’s shares began rallying as meme-stock mania swept over the markets again. Days later, when a new filing showed that Mr. Cohen’s stake in the company had increased due to Bed Bath & Beyond stock buybacks, shares of the company surged higher.

But as the stock climbed, Mr. Cohen began selling, unloading his entire stake. He earned a profit of about $60 million. Bed Bath & Beyond shares fell sharply after Mr. Cohen disclosed his sale. The move led to a lawsuit accusing him of engaging in a so-called “pump-and-dump” scheme.

A spokesman for Mr. Cohen at the time called the lawsuit “meritless” and “built on unsubstantiated claims,” saying that Mr. Cohen would seek dismissal. Mr. Cohen said he couldn’t comment on Bed Bath & Beyond due to a standstill agreement with the company. Bed Bath & Beyond didn’t respond to a request for comment.

Lessons from Teddy

Mr. Cohen said he now spends most of his days reading newspapers, financial statements and proxy statements or conference-call transcripts, sleeping as little as four or five hours each night. He is on the search for other low-priced stocks, he said, and hasn’t ruled out another activist campaign. He said he doesn’t have time to socialize much.

In mid October he called Mr. Icahn and asked to meet him at his Miami home. He said he had no agenda and just wanted to meet the activist investor who gained fame in the 1980s clashing with companies such as TWA. Mr. Cohen, who is not a wine connoisseur, said he brought a $1,000 bottle of Chateau Mouton Rothschild, because he had heard of Mr. Icahn’s taste for fine wines.

At the end of the meeting, Mr. Cohen asked for a picture with Mr. Icahn. He obliged but according to people familiar with the matter was surprised to see Mr. Cohen post it the next day on Twitter, where he has more than 300,000 followers. The uncaptioned picture showed Mr. Cohen in a white oxford and slacks and Mr. Icahn in rumpled shorts and a pink polo. Social-media commenters suggested it signaled Mr. Icahn had endorsed GameStop. In fact, the elder activist had indicated to Mr. Cohen he thought GameStop was overvalued, the people said.

For now, Mr. Cohen said he is working on a series of children’s books called “Teddy,” based on lessons he learned from his father. They include the importance of working hard, saving money and investing.

His father, he said, also taught him to treat the little guy with respect.

“I admire the individual investors, and institutional Wall Street mocks them,” Mr. Cohen said. “Frankly, it makes me sick.”

—Cara Lombardo and Akane Otani contributed to this article

Write to Miriam Gottfried at Miriam.Gottfried@wsj.com and Caitlin McCabe at caitlin.mccabe@wsj.com