GameStop (NYSE: GME) CEO George Sherman is all out of lives and will be stepping down from his role at the company on July 31, unless a successor is appointed earlier. Shares in GameStop rose as much as 12% in regular trading on Monday as a result.
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The announcement comes as no surprise to investors familiar with the company’s recent hires. Since coming on board last December, Ryan Cohen, the co-founder and former CEO of online pet supplies retailer Chewy, has been cementing his control over GameStop. Cohen’s RC Ventures firm actually owns a 13% stake in GameStop and has been seeking to gain more control over the gaming business.
So, what’s next for GameStop?
There has been no clear succession plan laid out as of yet. Sherman, who has been CEO since April 2019, will soon be out, with Cohen to become chairman following GameStop’s next shareholder meeting in early June.
Sherman was upbeat about the move, stating:
“I am very proud of what we have accomplished at GameStop over the past two years, including during the difficult Covid-19 pandemic. We have helped bring stability and strength to the business.”
The company has undergone massive challenges since Sherman’s appointment, enduring declining console sales, a (delayed) pivot to online retail, a global pandemic, and a controversial short-squeeze back in January.
‘Roaring Kitty’ steps in!
Keith Gill, the investor many accuse/credit for being behind GameStop’s meteoric rise to fame among retail traders, has also pumped up the bulls once more. The investor, who goes by ‘DeepF——Value’ on Reddit and ‘Roaring Kitty’ on YouTube, exercised his 500 GameStop call options contracts as they expired on Friday, giving him 50,000 more shares at a strike price of just $12. If he had sold the options at Friday’s price, he could have made more than $7 million on the bet. Instead, Gill doubled down and bought 50,000 more shares, making his total stake in the company worth more than $30 million.
This vote of confidence in the business from Gill will likely see his thousands of fans follow suit, resulting in further upswings in the hugely volatile stock. At this point, nobody is under any illusion that GameStop’s stock price isn’t wildly detached from its fundamentals, but the hype is showing no signs of slowing.
While GameStop shares have come way off their record high of $483 in January, the stock is still up a whopping 850% for 2021.
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