According to Wikipedia, Ryan Cohen is an American entrepreneur and businessman famous for being the co-founder and former CEO of the food-based e-commerce pet store Chewy, in 2011. According to Celebrity Net Worth, Chewy was co-founded by Michael Day and was later acquired by PetSmart for $3.35 billion in 2017. Ryan Cohen is also an activist investor and the current chairman of GameStop. According to Idol Net Worth, he is also a member of the Executives. His net worth as of 2021 is $2.1 billion. Wondering how he achieved this, you ask? Thankfully, you are in luck. Here is how he did it.
An Early Pivot
Ryan Cohen started working at a very young age. He says he has been working since he was 13. Back then, he was building websites for family members and local businesses. According to Tuko, Ryan credits his father Ted, who ran a glassware importing business, for being his mentor. Therefore, his success is not much of a surprise, considering he grew up with an entrepreneur as a father. Despite the humble beginning, his career has risen steadily to greatness over the years. At the age of 15, Ryan gained interest in an e-commerce referral venture, where he made money by referring customers to e-commerce sites. Later on, when he was in college, Ryan moved to affiliate marketing. This is how he met Michael Day, his chewy business partner. According to Hbr, they met in an online chat room discussing website design and computer programming and immediately hit it off. They started talking about venturing into a business together. They first settled on online jewelry sales.
Cohen and Day thought opening an online jewelry store was a great idea in an industry ripe for disruption. Thus, they dropped out of college, intending to get their business idea off the ground. They built the website for the store, and they set up delivery systems. Additionally, they purchased the inventory and put up a safe in the office to store it. However, before their set launch, Cohen had a revelation that he was getting into the wrong business. He was in a local pet store shopping for his toy poodle Tylee when he realized that he was not passionate about jewelry. However, like any other pet parent, he cared about the welfare of his dog. It was then that he decided to get into the pet industry.
By then, the pet industry was big, growing, and advancing from mass market to premium. On that account, they sold all their startup jewelry safe and launched chewy as MrChewy in June 2011. Cohen and Day approached various venture capital firms, but they were constantly turned down. Nonetheless, they finally struck gold when they landed funding in 2013 from Volition Capital. Larry Cheng, the then managing partner and co-founder of the Volition Capital, thus became the first investor of Chewy, injecting a whopping $15 million into the company. This, however, was not the first time they had tried to approach him. They had met him in 2012, but only six months later, Cheng agreed to sign off an investment. After that, the company then rapidly raised over $200 million in funding. This only proved to be the start of its rise as, by 2016, chewy had generated $900 million in sales, an additional $350 million in 2017, and became the top online pet retailer. That same year, Cohen and his partners were approached by their brick-and-mortar competitor, PetSmart. Eventually, they agreed to sell Chewy at $3.35 billion. This was one of the largest acquisitions in the history of the e-commerce industry. According to Celebrity Net Worth, that year, Cohen was named to the Fortune 40 under 40 list in 2017 and remained on as the CEO of Chewy before stepping down in 2018 before the company went public. Chewy’s revenues continued to rise even after the acquisition, hitting $3.5 billion in 2018, even though its losses narrowed down to $267 million. In June 2019, PetSmart spun Chewy off into a publicly-traded company at a valuation near $9 billion, close to three times the sale price only two years before.
Investments in Several Companies
In June 2020, Ryan announced that he intended to invest his liquid cash into Apple and Wells Fargo. Whether he followed through on that or not remains unclear. However, a month later, he reported that he had acquired a $500 million stake in Apple. This made him the largest individual shareholder of the tech giant. Additionally, he considered investing in GameStop, a retail gaming company. He later announced in August 2020 that he had purchased 9 million shares worth $76 million, which implies an average price of $8 per share. This was about a 10% stake, which increased to 12.9% on December 17, 2020, through an amended 13D filing with SEC. According to these filings, Cohen’s firm, RC Ventures, has expressed willingness to get more involved with the company “to produce the best results for all shareholders. GameStop’s share price started surging following a Reddit investor's campaign. The stock price remained volatile but has risen considerably from the $8 fee that Cohen paid. This has led to a significant return on his investment.
So how much did Ryan Cohen benefit from his investment in GameStop?
According to CNBC, Ryan Cohen is the chief beneficiary of the GameStop rise as he has scored a 25 fold gain on his stake. Cohen invested $76 million for a stake of about 13% of the company. As of now, Cohen’s 13% stake is worth more than $1.9 billion. Ryan Cohen is also the current Chairman of GameStop’s board and the company’s largest shareholder up to date. The Ryan Cohen story is very inspirational. Despite his humble beginnings, he achieved his billionaire status by one great idea, commitment, and a couple of smart investments.
Written by Allen Lee
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