GameStop CEO George Sherman is stepping down, sending stock soaring

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The news is no big surprise, given that Ryan Cohen, the co-founder and former CEO of online pet store, is Tough ALL, have strengthened his control over GameStop.
Cohen, whose RC Ventures company has a nearly 13% stake in the company, will become GameStop GME chairman after the next shareholders’ meeting in early June.

Shares of GameStop were up more than 15% early trading Monday.

Sherman, a veteran retail executive who has only been CEO of GameStop since April 2019, inherited a tough job when he took over two years ago.

“I am very proud of what we have achieved at GameStop over the past two years, including during the difficult Covid-19 pandemic,” Sherman said in a statement. “We helped give stability and strength to the company.”

Sherman was accused of flipping GameStop at a time when sales of many game consoles were declining and people were increasingly downloading new games instead of buying them from stores. Shortly after Sherman joined the company, he announced plans to close up to 200 stores.

“GameStop appreciates the valuable leadership that George has provided throughout his tenure. He has taken many decisive steps to stabilize the company in challenging times. The company is much stronger today than when he joined him,” Cohen said in a statement.

But Sherman never really got a chance to carry out his turnaround plan. The outbreak of the Covid-19 pandemic in March 2020 rocked the economic landscape for the entire retail sector. GameStop had to temporarily close stores.

Hedge funds are crushed by the worst tightness in a quarter of a century
Cohen enters. He took a share in late 2020, news that revolutionized traders on Reddit’s WallStreetBets board who believed Cohen could get GameStop back on track.
GameStop became the quintessential meme stock in January, when social media fans competed against hedge funds betting the stock would fall. Lawmakers on Capitol Hill even held hearings on the stock’s surge and how it was being handled by online trading giant Robinhood.

GameStop’s stock is up more than 700% this year – although as of the end of January, the stock is trading nearly 70% below its Reddit-infused all-time high.

Cohen claims to have more control over GameStop since investing in the company. Over the past year, GameStop has hired several executives from Chewy and Amazon to help lead the company’s transformation into a more online retailer.

The transition is showing some early signs of success.

While GameStop’s most recent quarter total sales were 3% lower than a year ago and below Wall Street expectations, online sales have more than doubled. E-commerce now accounts for more than a third of total revenue, down from just 12% in the fourth quarter of 2019.

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