GameStop Soars With Activist Ryan Cohen Gaining Board Seats
(Bloomberg) -- GameStop Corp. jumped as much as 17% Monday after activist investor Ryan Cohen stepped up his transformation efforts at the struggling video-game retailer, gaining a seat on the company’s board along with two allies.
Cohen’s RC Ventures -- GameStop’s second-largest shareholder, with a 13% stake -- has been pressing the Grapevine, Texas-based chain to undertake a strategic review to cut more costs. Cohen, the entrepreneur who helped build up the Chewy pet-supply site, also wants GameStop to increase the variety of products and services it offers online.
“We are excited to bring our customer-obsessed mindset and technology experience to GameStop and its strategic assets,” Cohen said in a statement Monday.
GameStop shares rose as high as $20.65 and were up 15% to $20.30 at 9:52 a.m. in New York. The stock rocketed up 210% last year on hopes that it would benefit from the release of new video-game consoles. GameStop lost some ground in early December after reporting third-quarter sales that missed estimates and announcing plans to sell more stock, but it rebounded toward the year’s end.
Along with Cohen, Alan Attal and Jim Grube are joining the GameStop board. Both men worked with Cohen at Chewy.
Also Monday, GameStop reported a 4.8% year-over-year increase in comparable-store sales for the nine-week holiday period ended Jan. 2. Coronavirus-related losses of store traffic knocked a high-single-digit to low-double-digit percentage off those sales, the company said, and net sales dropped 3.1% to $1.77 billion.
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