GameStop’s trainwreck interview is the best media training case study of the year
CEO Ryan Cohen delivered a masterclass on how not to conduct a live TV interview
If you needed a case study on the financial cost of a CEO who is not media-ready, the past fortnight has delivered one of the most expensive examples in recent memory.
GameStop CEO Ryan Cohen’s shambolic appearance on CNBC’s Squawk Box, where he attempted to defend an unsolicited US$56 billion bid for eBay, has been credited with wiping roughly 10 percent off GameStop’s share price in a single session. Within the week, eBay’s board had formally rejected the offer as “neither credible nor attractive.” As a result, the deal that was meant to be transformational was being openly dissected as a communications disaster.
For investor relations professionals and the executive teams we support, the GameStop episode is more than a piece of meme-generating mid-cap US drama. It is a real-time reminder that on the ASX, small-cap stories often live or die on the credibility of one or two people at the top. In the ASX context, a single poorly handled interview can do quantifiable damage to a share register that has taken years to build.
What actually went wrong
Cohen had every advantage walking into the interview. For context, he founded online pet supplies business Chewy in 2011 with the aim of taking on Amazon, in a category most observers thought Amazon had already locked up. Through years of well-publicised scepticism, Cohen stuck to his guns and eventually sold the business to PetSmart for US$3.35 billion in 2017. This vindicated a thesis that very few people on Wall Street had been willing to underwrite at the start.
He then took that capital and founded RC Ventures, the investment vehicle that built a substantial position in GameStop at a time when the video game retailer was widely written off as a doomed dinosaur of the bricks-and-mortar era. His arrival on the register sparked speculation on Reddit forums like r/WallStreetBets, as pandemic lockdowns kept retail traders indoors and online. Additionally, Cohen was quickly heralded as the anti-establishment figure who would take on the short-sellers and win.
The rest of the story is now part of capital markets folklore. GameStop shares exploded in early 2021 as retail traders piled in. This triggered a colossal short squeeze that propelled the stock from around US$5 to a peak near US$500. The squeeze wiped out billions of dollars of hedge fund positions in the process.
So when Cohen logged on to defend an unsolicited US$56 billion bid for eBay on Squawk Box, he was not some sacrificial lamb being served up to the financial media pack for the first time. Instead, he was a serial operator with a genuine M&A success behind him and a cult investor following. He was also the public face of a bold, headline-grabbing acquisition proposal.
On paper, this should have been a routine appearance. What he delivered instead was 16 minutes of grim viewing: awkwardly long pauses, wandering eye contact, visible irritation with the hosts, and a refusal to engage with the most obvious and predictable question of the morning. Specifically, that question was how GameStop intended to bridge the roughly US$16 billion gap between its financing and the proposed acquisition price.
His answers were both combative and bewildering. When pressed on the funding structure, his answer was “I don’t understand your question,” followed by silence. Further, when asked to point to evidence he could grow a mature consumer business, he pivoted to attacking the network for its historical coverage of GameStop. He did this rather than answering the question that retail and institutional investors were genuinely waiting to hear answered.
The market’s reaction in the aftermath of the interview was swift and damning. GameStop closed down more than 10 percent on the day and continued to gutter. Notable holders, including Michael Burry, exited their positions in the days that followed.
By the time eBay’s board formally responded, the narrative around the bid had already moved from “audacious” to “not credible.” In the meantime, Cohen had spent most of the intervening week posting personal items for sale on eBay. This was in a cringeworthy bout of social media performance art.
Whatever strategic merit the underlying transaction may have had, the botched communications execution effectively detonated it.
Why this matters for ASX executives
It would be easy to file the Cohen interview away as an amusing spectacle involving a uniquely unconventional executive. However, the dynamics that turned a bungled 16-minute appearance into a quantifiable destruction of shareholder value are arguably magnified in the ASX small-cap space.
ASX small-caps are sold on conviction. Resources investors are asked to back a management team through years of exploration risk, capital raising cycles, permitting timelines and commodity price volatility, often before there is any revenue to anchor the story. Similarly, tech investors are asked to underwrite a roadmap of product development, customer acquisition and platform scaling, often through multiple raises. This happens well before recurring revenue or unit economics settle into anything an analyst would call predictable.
The CEO and the technical leadership are the story in a way that is rarely true for large-cap industrials or established consumer brands. When they perform poorly in a broker presentation, a media interview or an investor webinar, the damage shows up in the bid-ask spread the next morning. In addition, the damage appears in the research notes that don’t get written, and in the cap table the next time a placement is sought.
The companies that consistently outperform on capital markets engagement are the ones whose management can sit in front of a camera, or a room full of sceptical institutional investors, and articulate the investment thesis with clarity, confidence and credibility under pressure.
What good media preparation actually looks like
Media training is one of those line items that tends to get deferred until it is too late. There is a persistent and dangerous assumption among technically excellent executives (who know the story better than anyone else in the room), that the communication piece will take care of itself.
The GameStop interview is a useful corrective to that assumption, because Cohen unquestionably knew his own deal rationale better than the CNBC hosts did, and it made no difference whatsoever to the outcome.
Effective preparation for senior leadership covers several things that are not intuitive to most first-time interview subjects. It covers:
- The discipline of bridging from a difficult or hostile question back to the two or three key messages the company actually needs in the market that week.
- The body language and on-camera presence that determine how a viewer reads confidence and credibility within the first 30 seconds of an interview, often before a single word of substance has been processed.
- The questions a journalist or analyst is almost certainly going to ask, the questions they might ask, and the questions the executive hopes they will not ask, with rehearsed and approved language ready for each.
- Continuous disclosure obligations and the very specific boundaries within which an ASX-listed executive can speak about forward-looking matters, capital plans, results and corporate activity without creating a disclosure problem the company will then have to clean up.
The practical takeaway for IR teams and boards
The calamitous Cohen interview has already gone viral and will likely be replayed in media training rooms for years, and rightly so.
The cost of doing media training is modest. The cost of not doing it, as GameStop has just demonstrated in front of a global audience, can be measured directly in market capitalisation and in the willingness of capital to back the next raise. It also impacts the next deal or the next chapter of the company’s growth story.
At Investability, media training and message development is one of the core services we provide to ASX-listed companies, alongside investor narrative, ASX announcement review, investor events and capital markets strategy.
If the Cohen interview prompted even a flicker of “I’m not 100 percent sure how our CEO would handle that question on ABC next week,” that flicker is worth acting on while the cost of acting on it is still preparation rather than repair.
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Author: Dannika Warburton
Dannika is Founder and Principal of Investability, an Australian investor relations and media relations consultancy, with over 15 years capital markets experience across investment banking, institutional sales and IR.
