Just three months after joining GameStop’s board, Ryan Cohen, the billionaire investor mounting an effort to turnaround and restructure the ailing brick-and-mortar business, has been tapped to head up the company board, once again fueling bullishness among investors who’ve plowed into the stock at unprecedented levels.
GameStop announced Thursday it intends to elect 35-year-old Cohen, the former CEO and cofounder of booming online pet supplies store Chewy, as board chairman after the company’s annual shareholder meeting on June 9.
The Grapevine, Texas-based firm has also tapped venture-capital veteran Larry Cheng, the cofounder and managing partner of Boston-based Volition Capital, and Kraft Heinz Senior Vice President Yang Xu as additional board members.
The Thursday announcement adds on to a slew of recent board and executive-level shakeups at GameStop, as Cohen mounts an effort to improve the company’s digital presence and customer service experience alongside two other board members, including former Chewy executive Alan Attal and Hestia Capital Founder Kurt Wolf, an activist shareholder who (like Cohen) has blasted former directors for GameStop’s poor financial performance.
The company also announced Thursday it plans to pay its directors solely with GameStop shares, as opposed to the up to $140,000 most directors received in cash last year (representing a slight majority of total compensation).
GameStop shares, which have skyrocketed a staggering 930% this year, soared more than 6% in pre-market trading following the announcement.
$1.9 billion. That’s how much Cohen, who owns roughly 13% of GameStop shares, is worth as of Wednesday’s market close, according to Forbes.
GameStop’s unlikely surge has continued with a vengeance (and volatility) since Reddit traders declared it their meme stock of choice in January, as they plowed into Wall Street’s most heavily shorted companies. The plight of brick-and-mortar retailers hit GameStop particularly hard over the past decade, wiping out nearly 90% of the stock’s gains through the end of 2019 as PC gaming and independent companies like Minecraft gobbled up market share. The firm’s current CEO George Sherman came on board in April 2019, but GameStop’s stock began to surge at the tail-end of last year, as 35-year-old Cohen started buying up shares and blasting management for “lack[ing] the mindset, resources and plan needed to [help GameStop] become a dominant sector player.” Cohen’s growing stake helped him and a couple of his Chewy colleagues earn seats on GameStop’s board in January, fueling bullishness among Reddit traders expecting the turnaround.