Shares of GameStop Corp jumped over 40 per cent on Monday after the world’s largest video game retailer tapped Chewy co-founder Ryan Cohen to spearhead a new committee to help its transition to an e-commerce business.
Cohen, who is a major GameStop shareholder, has been pushing GameStop to move away from its traditional brick-and-mortar model since joining the board shortly before a social media frenzy drove a meteoric rise in the company’s stock.
The latest rally comes on the heels of several wild swings in the company’s share price from January. Since then, GameStop has become one of the hottest and most visible of “meme stocks” that are closely followed on social media sites such as Reddit’s popular WallStreetBets forum.
The stock surged more than 1,600 per cent in January after a wave of buying forced large short-sellers betting against the company’s shares to unwind their positions, before paring most of those gains the following month.
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Last week, Cohen posted a cryptic tweet of an ice-cream cone, with analysts speculating on whether that was a trigger for GameStop’s most recent rally.
Cohen’s RC Ventures activist firm reached a settlement with GameStop in January, giving Cohen seats on the company’s board.
Stocks, including those of AMC, headphone maker Koss Corp and mortgage firm Rocket Companies, were up between 10 per cent and 25 per cent on Monday. GameStop shares were up 31 per cent at $181.50.
GameStop said its Strategic Planning and Capital committee, which will comprise of board members Alan Attal and Kurt Wolf along with Cohen, will help drive the latest e-commerce push.
GameStop’s sales through brick-and-mortar stores are under increasing pressure, as more customers gravitate towards digital downloads of console games, amid intensifying competition from videogame streaming services.
(Reporting by Manas Mishra and Subrat Patnaik in Bengaluru; Editing by Bernard Orr and Nick Zieminski)