GameStop, a struggling video game retailer, announced Thursday that it intends to nominate Chewy.com co-founder Ryan Cohen as chairman of the board following its next shareholder meeting on June 9, the move was loud. It is likely to encourage some investors who continue to tend to grow in GameStop stock and look at Cohen̵7;s plans to “rebrand” retailers as an integral part of valuation. That soared very quickly
Cohen, who sold PetSmart pet supplies retailer Chewy for $ 3.5 billion in 2017, is often wary of his investment strategy, investing in big, secure stocks such as Apple and Wells Fargo, however. Cohen bought about 10 percent of the stake in GameStop last August when short sellers thought the slumping stock would still lose value. He raised his stake to 13 percent in December, taking the number of seats on the company’s board in the process.
During his time with the retailer, Cohen was not ashamed of pushing GameStop to “immediately shift from a brick-and-mortar idea to a technology-driven vision” as he filed this story. In a November filing, “If GameStop took a helpful step to cut down on excessive real estate costs and hire the right talent, it would have the resources to start building the platform.” Efficient ecommerce that offers competitive pricing, wide selection of games. Experience the excitement and satisfaction of our customers.
“[Cohen] It seems to have a vision of what the company should be in the future. Telsey Advisory Group analyst Joseph Feldman told Ars in January. It makes sense when there is a change in the market, so maybe it will accelerate it. It is definitely something to watch. “
Was Cohen the organization’s savior?
Cohen’s ambitious plans for GameStop are at the heart of the analysis of the most promising GameStop stocks found on the board. Reddit’s WallStreetBets and elsewhere, those analyzes helped ease the short-term squeeze cycle, which led GameStop’s share price to above $ 350 in late January after the start of the year below $ 20.
GameStop’s share price fell to $ 40 after those highs before hitting another jump in February to a price of $ 200 and up. Stocks have continued to resist gravity since then, closing below $ 180 on Wednesday, despite continued disappointing earnings and analysts’ estimates suggesting an average share price of $ 27.
(GameStop’s share price was up about 10 percent immediately after the announcement Thursday morning. But back down to the previous closing level in the early afternoon)
SEC rules prevented GameStop from being charged for soaring stock prices in January. Earlier this week, the company announced plans to sell up to 3.5 million new shares to raise up to $ 1 billion (or $ 622 million at Wednesday’s close) that money will be used. “To keep accelerating [GameStop]Changes, as well as for the general purpose of the organization and strengthening the balance sheet, ”according to the announcement.
GameStop’s share price briefly fell after Monday’s share sale announcement, as some shareholders realized the sale of the new shares could bring down the value of GameStop’s approximately 70 million outstanding shares, but after The stock rose as some investors were convinced that the cash immersion would help the plan. Cohen’s ambitious “change”.
The planned changes seem a little vague. In the company’s latest earnings call, GameStop CEO George Sherman said GameStop wanted to transform “into a technology company that customers love and delight gamers”. “Additional distribution options to improve delivery speeds” and “increased product offerings” in sectors such as PC games, mobile games, and TV games.
“The focus on the customer experience is reminiscent of Chewy, which, since its inception, has been praised for its stellar support,” wrote a recent optimist author of the site GameStop Due Diligence. Ryan Cohen has personally contacted disgruntled clients, so it is likely that this is the most important aspect of the new management team.
In the WallStreetBets community That rude Reddit post announcing plans to make Cohen president had horrible comments, with most of them over 1,400 in just hours, “OH MY GOD ITS HAPPENING, STAY CALM EVERYONE” read one. Comments express enthusiasm.