GameStop Corp’s George Sherman, pictured, will step down as chief executive officer at the end of July, it has been announced
GameStop Corp’s George Sherman will step down as chief executive officer at the end of July, it has been announced.
Company shares rose more than 8 per cent before the opening bell on Wall Street Monday.
Sherman’s move to step down comes as Ryan Cohen, co-founder and former CEO of online pet food company Chewy Inc, tightens his grip on GameStop after taking over as chairman earlier this month.
GameStop’s former CFO, Jim Bell, and former chief customer officer, Frank Hamlin, are among the senior executives who have also left the company in recent weeks.
Cohen had been buying huge stakes in the company and pushing for a digital transformation. GameStop has suffered as more gamers turn to digital downloads rather than the discs the chain sells on its shelves.
Cohen was joined by two of his former colleagues on the board.
They’re arrival coincided with the meteoric January rise of GameStop’s shares in a bizarre market phenomenon that pitted smaller investors who banded online against major, institutional investors who had been shorting the stock, or betting it would fall below the $20 price level in January.
Company shares rose more than 8 per cent before the opening bell Monday
Shares of Gamestop Corp. now cost around $170, up 720% this year. At the end of a flurry of trading in January, the shares were close to $500 each.
Last month in a regulatory filing, GameStop said that it had and hired an executive headhunter as it evaluated company leadership and that its directors had spoken to potential candidates from gaming, e-commerce and technology sectors.
Earlier this month, GameStop said that it would sell up to 3.5 million of its shares.
The shares will be sold through an ‘at-the-market’ offering, which allows companies to place their stock on the market over a period of time.
Video game retailer GameStop says CEO George Sherman will be stepping down from his post
The changes have coincided with the meteoric January rise of GameStop’s shares thanks to the so-called ‘Reddit rally’
Reuters had earlier reported that GameStop’s board was working with an executive headhunter on the CEO search and that its directors had spoken to potential candidates from gaming, e-commerce and technology sectors.
GameStop also said Sherman had refused to receive compensation for his role as a director, both before and after separation date, and had agreed to cancel his 2020 performance-vested restricted stock award
Sherman has already forfeited more than 587,000 shares for failing to meet his performance targets, a regulatory filing showed last week.
Separately, Bloomberg reported that the man known as ‘Roaring Kitty’ on social media, whose online posts helped spark January’s trading frenzy in GameStop, exercised call options on the stock to acquire 50,000 more shares at a strike price of $12.
Bloomberg cited a screenshot of Keith Gill’s portfolio showing that he exercised 500 GameStop call options expiring Friday, when the stock closed at $154.69.
The screenshots were posted on Reddit by Gill, and his mother confirmed the posts to Bloomberg. Reuters could not immediately reach the Gills for comment on Saturday.
His total investment in GameStop is now worth more than $30 million, giving him a profit of nearly $20 million, Bloomberg said. Gill has 200,000 shares in the company, the report said.
Sherman’s move to step down comes as Ryan Cohen, right, co-founder and former CEO of online pet food company Chewy Inc, tightens his grip on GameStop after taking over as chairman earlier this month.
Gill was a key figure in the so-called ‘Reddit rally,’ which saw shares of GameStop surge 400% in a week before crashing back to pre-surge levels.
He began sharing his positions on Reddit’s popular Wallstreetbets trading forum in September 2019, posting a portfolio screenshot indicating he had invested $53,000 in GameStop.
By late January, Gill, known as ‘Roaring Kitty’ on YouTube and ‘DeepF***ingValue’ on Reddit, was up over 4,000% on stock and options investments in the company.
Last month, Gill appeared before Massachusetts securities regulators to testify as part of an examination into his activities.
Massachusetts Secretary of the Commonwealth William Galvin, the state’s top securities regulator, had subpoenaed Gill, who touted GameStop stock in his spare time while he was a registered broker and working at the insurer MassMutual.
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