GameStop bucks market sell-off with 19% surge as Reddit chatter picks up

Reddit

Shares of GameStop surged 19% on Thursday, bucking a broader market slump amid a massive sell-off as the chatter on Reddit appeared to gain traction yet again. 

Wiping out its earlier losses, GameStop rose to its highest level since the beginning of February, when the frenzy surrounding the video game retailer lost steam following the massive short squeeze that drove prices up in January.

The spike Thursday came later in the session, when several Reddit users on the Wall Street Bets subreddit began posting consecutively, rallying behind the stock. 

Among the most popular posts was published on Thursday morning saying “GME IS UNSTOPPABLE,” which received more than 10,000 upvotes, the equivalent of “likes” on other social media platforms.

At around the same time, Ryan Cohen, a GameStop board member, tweeted a photo resembling a stuffed toy from a Pets.com advertisement. Some users in the comments interpreted the post as a positive outlook for the video game company.

GameStop closed higher by 6.10%, at $131.76 on Thursday. 

Other meme stocks such as AMC Entertainment and Koss however joined the rest of the market, closing lower for the day. The Nasdaq 100 erased gains for the year, plummeting from its February 12 peak.

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GameStop’s CFO is resigning as the company attempts a ‘transformation’ led by activist investor Ryan Cohen

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Video game retail chain GameStop.

  • GameStop just lost a key member of its executive team: Chief Financial Officer Jim Bell is resigning.
  • The move is intended “to help accelerate GameStop’s transformation,” the company said.
  • Bell’s resignation is the first major exec shakeup at GameStop in two years.
  • Visit the Business section of Insider for more stories.

Just under two years since he joined GameStop as Chief Financial Officer, Jim Bell is resigning as of this week.

In a press release, GameStop said it is looking for a new executive to take Bell’s place. The candidate should have, “the capabilities and qualifications to help accelerate GameStop’s transformation,” the release said.

Senior Vice President and Chief Accounting Officer Diana Jajeh will serve as interim Chief Financial Officer while the company searches for a permanent replacement.

Bell was part of a new executive team chosen to lead GameStop out of dire financial straits in 2019, alongside CEO George Sherman. Bell oversaw GameStop’s financials during an especially bizarre period of the company’s long history: From historically low stock values in much of 2019 and 2020, to the explosive bubble of early 2021, and throughout the ongoing coronavirus pandemic.

GameStop’s executive team has come under increased scrutiny as activist investor Ryan Cohen bought up a major stake in the company in 2020. Cohen now occupies a space on the company’s board. In November 2020, Cohen published an open letter to GameStop shareholders that criticized Sherman, Bell, and the rest of GameStop’s executive leadership team.

“Through our private conversations, we have explained to Mr. Sherman and the Board that GameStop has the ability to pivot toward becoming a technology-driven business that excels in the gaming and digital experience worlds,” Cohen wrote in the letter. “But this pivot requires the type of strategic vision that has not yet taken hold in the c-suite or boardroom.”

It appears that this is the “transformation” that GameStop is referring to in the press release announcing Bell’s resignation, but a request for clarification to GameStop went unanswered as of publishing.

Got a tip? Contact Insider senior correspondent Ben Gilbert via email (bgilbert@insider.com), or Twitter DM (@realbengilbert). We can keep sources anonymous. Use a non-work device to reach out. PR pitches by email only, please.

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Chewy founder Ryan Cohen has reaped a 1,700% return from a $76 million GameStop investment he made last year

Ryan Cohen
  • Chewy.com co-founder Ryan Cohen acquired a 12.9% stake in GameStop last year for $76 million.
  • At Monday’s high of $159.18, Cohen’s stake in the video game retailer had swelled to $1.4 billion, good for a roughly 1,700% return.
  • Cohen recently gained three board seats and is pushing the company to transform into a specialized e-commerce retailer. 
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Activist investor Ryan Cohen’s investment into GameStop last year proved to be good timing on Monday after shares exploded higher by as much as 145%.

An epic short squeeze rally, combined with pockets of investor euphoria found on popular trading forums like Reddit’s WallStreetBets, helped propel shares of GameStop to an all-time high of $159.18 in Tuesday trades.

Cohen amassed a 9 million-share stake in GameStop last year at an average price of $8.43, worth $76 million at the time. At it’s intra-day high today, that stake was worth as much as $1.4 billion, representing a return of more than 1,700%.

But Cohen seems to be playing the long-game on GameStop. Through his firm RC Ventures, Cohen had petitioned the board of GameStop to adopt a strategy that would transform the company into a specialized e-commerce retailer of gaming products.

Cohen utilized a similar strategy for his previous company, Chewy.com, which is a specialized e-commerce retailer of pet products. After being acquired by PetSmart for $3.5 billion, Chewy went public and is now trading at a valuation of more than $43 billion.

GameStop seems to have been receptive to Cohen’s proposal, granting him three seats on the board of directors, including one for himself. 

Since Cohen’s first purchase of shares of GameStop on September 14, shares are up as much as 2,317%.

Read more: BANK OF AMERICA: Buy these 31 unheralded stocks as the recovery’s hottest trades of recent months continue to gain strength in 2021

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