The GameStop Corp (NYSE: GME) stock price surged 7.52% on news that it had appointed activist investor Ryan Cohen as its new CEO, Chairman and President. Ryan will assume his new roles immediately and will not receive a salary for serving in the three top roles.
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The rally higher is a vote of confidence in the new CEO, but there is no guarantee that he will turn around the company’s business and make it profitable. According to FactSet, Ryan Cohen and his investment vehicle, RC Ventures, remain the company’s biggest shareholder, with a 12.09% stake.
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Cohen first bought Gamestop stock in 2020 and joined the company’s board in 2021 at the height of the meme stock rally that saved the company from imminent bankruptcy. Cohen was later known as the King of meme stocks due to his investments in companies that became meme stocks, such as Gamestop.
The appointment of Ryan Cohen as CEO comes three months after GameStop fired then-CEO Matthew Furlong, who had just delivered the company’s first profitable quarter. After the firing of Furlong, longtime company insider Mark Robinson was appointed as its “principal executive officer” and general manager.
Before today’s appointment, Cohen was the company’s executive chairman and must step down from the role to assume his new roles. It remains to be seen whether he shall significantly impact the company in his new role as CEO.
Many astute investors have been waiting for Gamestop to diversify its business. Still, apart from some vague references to blockchain projects, Gamestop remains primarily a video game rental business, its largest revenue stream.
Cohen has not had a significant impact on the company in his previous role as executive chairman, so I wonder whether he shall bring any tangible differences to the business as its new CEO and President.
GameStop share price.
The Gamestop stock price surged 7.52% to trade at $18.44, from Wednesday’s closing price of $17.15.
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