GameStop has turned to “Wall Street darling” Ryan Cohen as a potential savior.
According to Business Insider, the flailing video game retailer hired Cohen to lead a planning committee tasked with accelerating the company’s transformation. The investor, known as “Papa” on the WallStreetBets subreddit, is most known as the co-founder of Chewy.com—a pet food e-commerce business that was sold to PetSmart in 2017 for $3.35 billion. Cohen also purchased a large portion of GameStop shares back in September, and is now the retailer’s single biggest investor with more than 12 percent of its shares. The move effectively jump-started the massive GameStop rally that shook Wall Street in mid-January.
Shortly after his initial 2020 purchase, Cohen called on GameStop’s board to create a transition plan that would help the company shift focus from its brick and mortars to additional e-commerce opportunities. Among his reported proposals was taking GameStop’s trade-in program to online.
“Through our private conversations, we have explained to [GameStop CEO George Sherman] and the Board that GameStop has the ability to pivot toward becoming a technology-driven business that excels in the gaming and digital experience worlds,” Cohen wrote in a letter to the board last year. “But this pivot requires the type of strategic vision that has not yet taken hold in the c-suite or boardroom of the company.”
On Monday, GameStop announced it had hired Cohen to lead its “Strategic Planning and Capital Allocation Committee,” which will also include former Chewy CMO Alan Attal and Hestia Capital Management’s chief investment officer Kurt Wolf.
“The Committee will continue to focus on identifying actions that can transform GameStop into a technology business and help create enduring value for stockholders,” GameStop wrote in a press release. “It is responsible for evaluating areas that include GameStop’s current operational objectives, capital structure and allocation priorities, digital capabilities, organizational footprint, and personnel.”
According to Business Insider, shares of GameStop surged once again following the announcement of Cohen’s role in the planning committee. Although its stock prices haven’t come near to January’s $483 peak, they did increase by 25 percent on Tuesday, marking the first time stock price surpassed $200 since Feb. 1.