GameStop Jumps as Chewy’s Cohen Tapped for E-Commerce Shift
(Bloomberg) -- GameStop Corp. shares extended their rally after the company tapped Chewy.com founder Ryan Cohen to guide its transition to an e-commerce business.
Cohen, a director at the video-game retailer, will chair a new board committee tasked with the transformation, the company said in a statement Monday, confirming an earlier report by Bloomberg News. The new strategic planning and capital allocation committee will be comprised of Cohen, Alan Attal and Kurt Wolf, GameStop said.
Its shares soared as much as 20%, adding to gains that had pushed the stock up more than threefold over the prior two weeks. GameStop has become a favorite of traders populating Reddit forums, whipsawing the shares recently as investors flocked to it in a short squeeze.
The new committee will be tasked with hiring executives to lead its customer care and e-commerce fulfillments, as well as finding a new chief technology officer and a new chief financial officer with technology and e-commerce experience. The committee will also identify opportunities to transform the company into a technology business and help improve shareholder returns.
It’s also responsible for evaluating areas that include GameStop’s current operational objectives, capital structure and allocation priorities, digital capabilities, organizational footprint, and personnel, the company said.
Cohen began pushing last year to transform GameStop into a more direct competitor to Amazon.com Inc., drawing on his success building Chewy into a pet-supply giant that sold for $3 billion. He won three seats on GameStop’s board earlier this year.
The activist investor joined the board of GameStop in January along with two allies. Cohen’s RC Ventures owns a roughly 13% stake in the video-game seller, and has pressed the company to undertake a strategic review to cut costs and to increase the variety of products and services it offers, and to transform from a brick-and-mortar retailer into an e-commerce company.
CFO Jim Bell was pushed out last month in a disagreement over strategy, a move investors took as a sign the video-game retailer is on the comeback trail.
Last week, the stock jumped after Cohen tweeted an apparent screenshot from a Pets.com television ad, with some Twitter users speculating that the image was a cryptic message about GameStop’s outlook.
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