Cohen Strikes Again!
GameStop has had quite a ride this year. To go from $10 to $500, while sparking a revolution in the stock market, many have been quick to label it as a “meme stock”. While it has had many irrational movements in the last few months, plenty of us fail to notice the actual change occurring inside the company.
It all starts with Ryan Cohen, the former CEO of Chewy, an online retailer of pet products. His identity as an activist investor was necessary for GameStop which was on the brink of bankruptcy. For those who don’t know, activist investors buy a significant stake in a company with the intention of having an influence on company actions. Cohen increased his stake in GameStop to 12.9%, and later joined the board, becoming the chairman of the company.
Yesterday, it was reported that George Sherman, the CEO of GameStop, is stepping down as part of a shakeup at the executive level of the company. These moves have been backed by Cohen, who has had a major influence on these decisions. He plans to take GameStop in the ecommerce direction, focusing on building a brand that sells a wide variety of items with lightning-fast shipping. Cohen can certainly be trusted with this; as we’ve seen, he built a multi-billion-dollar online retailer from scratch. However, he wanted to bring more ecommerce experience to GameStop, which is a clear cause of these recent executive changes. From parting ways with the Chief Financial Officer and the Chief Customer Officer while also bringing executives from Chewy and Amazon, it is clear that Cohen has big plans with the company moving forward.
Investors saw it this way too, as GameStop was up 12.12% at its peak on Monday. I know, those aren’t your usual 100 percent rises in the stock, but it was truly a healthy reaction to the exciting news. Will you be buying shares? As the past few weeks have shown us, GameStop is ready to finally shed off the meme label and become a fundamentally sound business.
I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.