Mar, 2021 - By WMR
Addition of Ryan Cohen, Ex-CEO of Chewy, as a board member, has proven to be an effective move for GameStop. The shares of the company peaked at US$38 on January 13th, 2021.
The American video-gaming retailer company, GameStop, has gone through an underdog phase since the past four years. The scenario changed on Monday, January 11th, as the company struck a deal with three new board members; CEO of Chewy, Ryan Cohen and his two former colleagues. The video-game retailer agreed with the board members on the terms that will let Cohen’s investment firm RC Ventures to acquire 9% of GameStop’s stakes. The collaboration has increased the market value of GameStop by US$1.2 billion within four days of the board members joining. All three members have vast experience in online marketing, retailing, e-commerce, and strategy planning. Upon joining, Cohen insisted the members to revise the company business model. He also urged them to focus more on digital sales rather than on the company’s retail outlets.
Another notable reason for hike in GameStop’s shares can be credited to the strong sales in Holiday season with the debuting gaming consoles such as Sony, Nintendo and Microsoft.
On Thursday, the stock again witnessed a surge and reached US$ 38 exceeding the closing price of the next day. That indicated a back-to-back four-day spike for the company to which many analysts advised its investors to avert from investing in it. GameStop is now in the right hands, and the sudden rise in its stocks is a reflection of that. After such a performance in the stock market, investors have gained confidence in the company and are expecting that Cohen will imitate the same success story for GameStop as he did with his pet supply company PetSmart in 2017.
GameStop has retained its position as a big player in the video-gaming industry in mere four days of its comeback.