GameStop (GME) shares rose Monday by as much as 10% in early trading following news that the computer game retailer’s CEO George Sherman is stepping down by July 31 after just 2 years on the task. The stock was still up 6.26% since market close on Monday.
The news also follows relocations by investor Keith Gill, who goes by “RoaringKitty” and “DeepF– ingValue” online, in which he worked out 500 call alternatives on GameStop’s stock at $12 giving him 50,000 additional shares, according to Bloomberg.
Gill also bought up another 50,000 shares of the business, bringing his total stake to 200,000 shares, or more than $33 million.
GameStop has been the king of the so-called meme stocks including AMC (AMC) and Bed Bath & Beyond (BBBY) that took off as retail financiers piled into the marketplace amidst the pandemic. Members of the Reddit board r/WallStreetBets were especially heavy investors in GameStop, pressing the stock up more than 3,000% in the last 12 months.
The trading frenzy spurred the trading platform Robinhood to briefly halt purchasing of GameStop in January. The next month, your home Financial Providers Committee held a hearing grilling various individuals in the GameStop saga, including “Roaring Kitty” himself along with the CEOs of Robinhood and Reddit.
Also in February, Gill was struck with a proposed class action suit claiming he misrepresented himself as an amateur investor, regardless of previously working in the financial services market. Gill maintains he did not provide any investing guidance throughout his YouTube broadcasts, in which he discussed his GameStop investments.
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Gill, and other investors, say they think in GameStop’s proposed turn-around plan, that will see the ailing traditional retailer change its company design to one that presses more digital sales. The strategy likewise calls for the company to expand its item offerings into areas tangential to gaming consisting of Televisions, screens, and other gaming devices.
Essential to that method is inbound GameStop chairman and Chewy (CHWY) cofounder Ryan Cohen, an activist investor in the retailer. Cohen’s competence in online sales is anticipated to be crucial to the business’s future plans.
GameStop reported its Q4 profits last month disappointing Wall Street expectations, with net sales down year-over-year from $2.19 billion in Q4 2019 to $2.12 billion. Online sales, however, increased 175%.
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