(CTN News) – Ryan Cohen has been officially appointed as the new CEO of GameStop Corp (NYSE:GME), replacing former head Matt Furlong, who was sacked by the company in June after the company suffered a larger-than-expected quarterly loss for the first time in its history.
When Furlong left the company in June, Cohen took on the role of executive chairman of the board, resulting in a reduction of the board’s headcount from six to five.
As a result of Cohen’s latest appointment, he has completed his comprehensive takeover of the high-street chain that he has been building since he acquired a controlling stake at the start of this decade.
In accordance with regulatory filings, Cohen has not indicated that he intends to receive any compensation for his role as the president,
Chief executive officer, and chair of GameStop.
Having made billions of dollars from the sale of Chewy, which he founded in 2011, Cohen stepped in on GameStop by becoming its largest shareholder in 2020 after purchasing a 10% stake in the company.
In response to a question about why he decided to invest in a legacy high-street retailer when the video games market was turning completely digital, he responded: “I bought GameStop because I thought it was cheap and the intrinsic value of the business was worth more than I paid for it.
As a matter of fact, there was a great deal of skepticism surrounding GameStop… but that is what I like about it… being able to look at things when no one else is looking at them.”
The gamble he took paid off in a big way for him.
Almost immediately after his investment, GameStop found itself at the centre of the infamous short squeeze phenomenon associated with the r/WallStreetBets community.
To artificially inflate the market value of GameStop, thousands of retail investors organising through the Reddit subchannel placed buy orders on GameStop shares, mainly through the retail trading platform Robinhood, in order to artificially inflate the share value of this company.
In the aftermath of the short squeeze, the private equity firms shorting the stock faced large-scale liquidations and the short squeeze increased in intensity.
Dumb Money is a feature film that chronicles the meme-stock craze that has swept across the global investing community, and is currently playing in cinemas around the world. Despite the fact that the film features Seth Rogan and Pete Davidson, neither Cohen nor Furlong are depicted in the film.
It would seem that Cohen’s credentials are well suited to solving the existential problems that GameStop is facing.
The sale of Chewy to PetSmart (NASDAQ:PETM) for $3.35 billion was a record-breaking e-commerce deal, creating a combined brick-and-mortar and online pet-supplies empire for the first time ever.
Lastly, GameStop must be able to adapt to the digitized nature of video game sales if it is going to continue to operate as a going concern over the long term.