On Monday, April 19, GameStop CEO George Sherman announced that he will be stepping down on July 31 or sooner if a successor is found within that time. In response, GameStop shares shot up 6.3% as people started to buy up stocks.
Sherman released a statement on his leaving 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”.
During the GameStop CEO's 2 years, revenue plunged, he laid off hundreds of employees, furloughed thousands, cut wages up to 30% and failed his performance goals.
After 2 years of work he leaves with an $184 million exit package – 8,041x worker pay https://t.co/4eh4c3BhKw
— Dan Price (@DanPriceSeattle) April 20, 2021
Sherman came in during a time where GameStop was having a difficult time (I mean they technically still are) when consoles sales were declining and more people were buying digital games instead of physical copies. At this point, it’s unknown who will take the position, but Joseph Feldman, an analyst with the Telsey Advisory Group, wrote in a note that “GameStop’s next CEO and CFO are likely to come from the tech industry, as with the other recent senior hires…”
The New Chairman?
Although Sherman was the CEO, Chewy co-founder Ryan Cohen appears to be the real leader over at GameStop. Cohen was brought in to be the head of a planning and funding allocation committee back in early March with the company planning to nominate Cohen to be its new chairman after GameStop’s annual meeting on June 9.
Cohen helped build Chewy into a giant in the e-commerce industry and GameStop hopes he could do the same by strengthening the company’s online operations.
In addition to Ryan Cohen, GameStop has also hired two other former Chewy executives and Elliott Wilke, a former director of Amazon Fresh stores, as its chief growth officer. Michael Pachter, manager director of equity research company Wedbush Securities, said the hires are aggressive moves to overhaul GameStop’s leadership to turn the company around.
— Ryan Cohen (@ryancohen) April 16, 2021
And even though George Sherman is the CEO, Pachter said “It appears to me that Ryan Cohen is running the company.”
Reaping the Benefits
As I alluded to earlier, Keith Gill aka Roaring Kitty exercised his 500 GameStop call options as they expired this past Friday and also bought 50,000 more shares in the company. With this new purchase, Gill now owns 200,000 GameStop shares valued at more than $30 million.
Roaring Kitty bought 50,000 more $GME shares in addition to exercising his calls. He now holds 200,000 shares of GameStop worth more than $34 million. "Final update" via Reddit: pic.twitter.com/fVdsCfTC7p
— Market Rebellion (@MarketRebels) April 16, 2021
Gill has said that he believes in GameStop’s turnaround plan and believes the retailer will change its business model to one that focuses more on digital sales
According to GameStop’s Q4 earnings, net sales were $2.12 billion in 2020, down from $2.19 billion in 2019 and comparable store sales went down 9.5%. However, the company’s global online sales went up 175% with the news release stating “We are off to a strong start in 2021…”
GameStop’s future is still a mystery, but the company seems to know what it’s doing.